All Alaska Cities

Alaska and High Alcohol Taxes

There’s a general link between how much booze costs and the amount consumed. The higher the price, the less alcohol overall the public buys. But the mechanism only works so far – at some point, citizens will simply start making their own “bathtub” booze in home distillation. Until that point is reached though, higher taxes on alcohol are usually considered a win-win.

The double win comes because higher prices hold consumption down while simultaneously increasing money into state coffers by way of taxes. But we’ve bumped up the taxes again, and this is receiving some strong criticism.

In the first place, things already cost a lot here in the Great White North. It’s a fact of life – getting stuff here costs money. Added to that, our state has already been in the top ten for taxes on alcohol. This latest increase puts us in the top three overall. (We are second highest for beer and wine taxes, seventh for liquor.)

According to the Daily News – Miner, one criticism is that the taxes were supposed to go toward enforcement of alcohol laws and treatment for alcoholism, and they largely have not. It makes sense to tax vices and use the funds to help remedy a social ill. It makes less sense just to punish users of a legal product.

Data from 2007 has us as the 9th “drunkest” state, with a per capita consumption of all types of alcohol at 35.4 gallons. Consumption is skewed toward beer and wine instead of hard liquor. Notably, despite raising taxes on alcohol in general, we offer tax breaks for locally brewed beers and wines. Our state is known for barley-malt based beers.

So is it working? No one can say for certain. Unlike in the lower 48, we aren’t surrounded by states that share our topography and have contrasting tax and alcohol consumption rates. In a sense, we stand alone.


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