Boozy Brits Do It Best: How Drinkers Are Subsidizing Teetotallers And Health Fanatics

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Guy Bentley Research Associate, Reason Foundation
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Britain’s drinkers are massively subsidizing their teetotal peers thanks to crushingly high alcohol taxes, according to a report from the Institute of Economic Affairs.

Using the latest available data, the IEA examined the amount of tax Brits paid for booze and looked at how much drinking-related problems were costing the government. The study found drinkers were far and away a net beneficiary to the taxpayer, contributing $10 billion more in revenue than they cost in government services.

In total, drinkers cost the government $5.9 billion thanks to healthcare, policing, criminal justice and welfare expenses related to excessive alcohol use. But this figure was eclipsed by the amount of cash the U.K. treasury rakes in from alcohol levies – $15.8 billion in 2015 prices.

Even if the government halved the draconian levels of tax of tax it levies on alcohol, boozers would still be playing their part to the put the Britain back in the black.

According to the IEA, the UK pays 40 percent of all alcohol taxes raised in the European Union. The punishingly high levels of tax have hit the traditional British pub hard. Since 2006, Britain has lost 20 percent of its pubs – falling from 58,000 to 48,000.

Some estimates have put the cost of alcohol to the UK at just over $30 billion. However, the IEA challenge these figures arguing they include lost productivity and other costs that are borne by individuals and not by the government. The study is the first of its kind to examine the net costs and benefits of alcohol consumption to the UK taxpayer.

The report’s author, Christopher Snowdon said, “it is time to stop pretending that drinkers are a burden on taxpayers. Drinkers are taxpayers and they pay billions of pounds more than they cost the NHS, police service and welfare system combined.

“The economic evidence is very clear on this. Forty percent of the EU’s entire alcohol tax bill is paid by drinkers in Britain and, as this new research shows, teetotallers in England are being subsidised by drinkers to the tune of at least six and a half billion pounds a year,” he added.

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Guy Bentley