A group in New Mexico is calling for a 25 cent increase in taxes on alcohol consumption.
The group, Alcohol Taxes Save Lives & Money, is calling on New Mexico Republican Gov. Susana Martinez to slap a 25 cent tax increase on alcoholic beverages as a way to increase revenue for the state and fund substance abuse treatment programs, according to the New Mexico Political Report.
“Let the people causing the problem pay for it,” Peter DeBenedittis, the group’s director, told the New Mexico Political Report.
DeBenedittis wants a 25 cent tax on wholesalers, but critics say the tax would likely be passed on to consumers.
“If you are a smoker or enjoy the occasional alcoholic beverage, you are probably aware that prices for these types of items have increased two or threefold in recent years,” an article on Financial Web states. “While many price increases may not be attributed to a corporate tax hike, whenever corporate taxes are increased – you will usually pay higher prices.”
Alcohol Taxes Save Lives & Money also thinks a new tax would help reduce excessive drinking, but New Mexico Democratic State Sen. George Munoz thinks that’s wishful thinking.
“In Gallup, people panhandle to drink so they’re just going to panhandle for another 25 cents,” Munoz said. Munoz added, “25 cents a drink is not going to change anybody’s mind.”
While the National Institute on Alcohol Abuse and Alcoholism says increased taxes on alcohol do lower rates of excessive drinking, the International Center for Alcohol Policies — now known as the International Alliance for Responsible Drinking — says different.
“Evidence shows that, when prices are raised, the heaviest drinkers are likely to shift their demand to less expensive products within the same beverage category,” their 2002 report said.
Others argue raising taxes to try and reduce rates of excessive drinking places an unnecessary burden on responsible drinkers.
President of the New Mexico Association of Commerce and Industry Jason Espinoza says he opposes the tax because it would “hinder” alcohol sales. Something DeBenedittis says is exactly the point.
“When prices go up demand goes down,” DeBenedittis said.
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