Saturday | July 23, 2016
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How to reduce crime: Pay a nickel more for a beer

It turns out there is something we can all to do reduce crime and save lives that has absolutely nothing to do with guns: Pay a little more for beer and other forms of alcohol.

In a fascinating article on The Washington Post’s “Wonkblog” last week, reporter Dylan Matthews reviewed the literature on crime intervention and discovered a dozen separate ways that crime can be reduced without fewer guns, more guns, tougher sentences, more cops or any of the other usual proposed remedies.

At the top of the list was lead abatement. Not the lead in bullets, but the lead in gasoline, paints and other environmental sources. Lead is a potent neurological toxin and specifically impacts decision-making abilities. Over the past 20 years, research shows, the correlation between government programs to remove lead from gasoline and paint and reduced crime rates has been immense.

Second only to less lead is higher taxes on alcohol. To quote Matthews:

“Economist Sara Markowitz, for example, found in a study of U.S. crime patterns that a ‘single percent increase in the beer tax decreases the probability of assault by 0.45 percent’ and ‘a 1 percent decrease in the number of outlets that sell alcohol decreases the probability of rape by 1.75 percent.’ Researchers in Finland found that a 2004 cut in the country’s alcohol tax caused a sudden 17 percent spike in fatalities relative to the previous year. There’s preliminary evidence that alcohol taxes can reduce the number of U.S. female homicide victims. [Criminologist Mark] Kleiman cites findings of Duke’s Philip Cook to the effect that a doubling of the federal excise tax on alcohol would reduce homicide and automobile fatalities by 7 percent each, for a net 3,000 lives saved. What’s more, it would only cost twice-a-day drinkers (who, as it is, drink considerably more than average) $6 a month.”

That being the case, you’d expect Congress to be considering increasing the excise tax on alcohol, right? Wrong. Congress is considering lowering it. In late March, 233 craft brewers from 46 states descended on Congress for a “lobbying day” on behalf of House Resolution 494. Like so many bills these days, it has a cute name: the Small Brewer Reinvesting and Expanding Workforce Act, or Small BREW Act.

Small breweries that produce fewer than 2 million barrels a year pay a $7-per-barrel excise tax on the first 60,000 barrels brewed each year. They pay $18-per-barrel on every 31-gallon barrel after that. Only about 100 of the nation’s 2,360 craft breweries produce more than 15,000 barrels a year.

The Small BREW Act would cut the $7 tax on the first 60,000 barrels in half, and reduce the tax on the 60,001st to 2-millionth barrel to $16. After 2 million, brewers would pay $18 a barrel, which is what big breweries already pay.

The excise tax hasn’t increased since 1991. Had the tax kept up with inflation, small brewers would be paying $12 and big brewers $30. Big breweries — including local favorite Anheuser-Busch InBev — don’t much like this idea. Their trade group, the Beer Institute, is expected to introduce a new version of its cutely named Brewery Employment and Excise Relief Act (BEER, get it?) later this year. The version in the last Congress would have cut taxes in half for every brewer, regardless of size.

The Beer Institute has touted the BEER Act as a way to give a break to the poor, downtrodden working class beer-drinker. The Small Brewers Association touts the Small BREW Act as a way to help small businesses at a cost of a mere $67 million to the government. But the math doesn’t help the poor working man argument. At $7 a barrel, the price of a $5 pint of microbrew contains less than 3 cents in federal excise taxes. A pint of Budweiser has 7.2 cents worth of $18-a-barrel federal excise taxes in it. A six-pack of Bud has 32.4 cents of federal taxes built into the price.

On the other hand, if you doubled the excise tax, the poor workingman would hardly notice. But the data show that thousands of hard-drinking bad drivers and bad guys would. You’d reduce auto accidents, homicide deaths, rape and other forms of assault. Congress, as usual, is headed in the wrong direction.

From the St. Louis Post-Dispatch


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