VI. Key Issues: Financing and Delivery >> C. Health Financing >> Health-Related Government Revenues (last update: 12.5.17)
General Consumption Taxes
- In general, “sin” taxes are regressive.Andrew B. Lyon and Robert M. Schwab, “Consumption Taxes in a Life-Cycle Framework: Are Sin Taxes Regressive?,” Review of Economics and Statistics 77 (August 1995): 389–406. 32.
Christopher Snowdon, “Aggressively Regressive: The ‘Sin Taxes’ That Make the Poor Poorer” (Current Controversies Paper 47, Institute of Economic Affairs, London, October 2013).
- Current Tax Rates. According to CRS, when converted to standard drink measures liquor drinks are generally subjected to a federal excise tax of approximately 13 cents per 1.5 ounce
shot, wine is taxed at 4 cents per 5 ounce glass, and beer is taxed at 5 cents per 12 ounce can or bottle. Alcohol excise tax collections totaled $10.4 billion in FY2015, with collections from
distilled spirits comprising 55.1% of that amount. A Brookings Report provides a more detailed breakdown of the complicated structure of current alcohol taxes (Table 1). A key feature is that hard liquor is taxed much more heavily than beer or wine.
- Taxes Relative to External Costs of Alcohol Use. There are varying estimates of the extent that alcohol taxes offset the external costs of alcohol use. According to a literature synthesis by the Congressional Research Service, current combined taxes on alcohol (including federal, state, and local taxes) are roughly one-quarter of the external costs of alcohol consumption (“One estimate finds the combined federal, state, and local taxes between 25 cents and 29 cents (in 2013 dollars) per ounce of pure alcohol compared with the external cost of $1.02 per ounce.” Lowry, Sean, Alcohol Excise Taxes: Current Law and Economic Analysis. Congressional Research Service, December 23, 2015, No. 7-5700).
- Impact on Alcohol Deaths. Adam Looney at Brookings estimates “Based on these studies, a 16 percent decline in alcohol excise taxes is estimated to result in between 281 and 659 additional motor vehicle fatalities in 2016 (relative to a baseline of 37,461 deaths) and 1,550 additional alcohol-related deaths.”
- Wagenaar et al. (2011) show that a doubling of the tax would reduce alcohol-related mortality by an average of 35 percent and traffic crash deaths by 11 percent. Wagenaar, Alexander C., Amy L. Tobler, and Kelli A. Komro, Effects of Alcohol Tax and Price Policies on Morbidity and Mortality: A Systematic Review, American Journal of Public Health, November 2010, Vol. 100, No. 11, 2270-2278.
- Cook and Durrance (2011) found the doubling of the alcohol tax in 1991 lead to a 4.7 percent decline in fatalities. Cook, Philip J. and Christine Durrance, The Virtuous Tax: Lifesaving and Crime-Prevention Effects of the 1991 Federal Alcohol-Tax Increase, NBER Working Paper 17709, December 2011.
- Ruhm (1996) finds that a 78 percent increase in taxes leads to a 7 percent to 8 percent decline in fatalities. Ruhm, C.J., Alcohol policies and highway vehicle fatalities, Journal of Health Economics, August 1996, Vol. 15, No. 4, 435–454.
Health Services Taxes
- State Tax Revenues. Quarterly and annual estimates of aggregate tax revenues (not broken down by state), by revenue source (individual income, corporate net income, property, general sales & gross receipts, motor fuel sales, tobacco product sales, alcoholic beverage sales, motor vehicle & operator’s licenses, and all other) are reported quarterly by Bureau of Census for the years 1994-present [pdf] [spreadsheet]. Historical data from 1962-1993 also are available.
- State Government Tax Collections. This Census report, issued each September, provides a summary of taxes collected by state for up to 25 tax categories. These tables and data files present the details on tax collections by type of tax imposed and collected by state governments. For each year, a summary table shows total collections by major category and sub-category for each state and the U.S. (Excel or txt format); data are available for 1992-2008.
- State Government Tax Collections. The Nelson A. Rockefeller Institute of Government also collects data on state tax collections. The differences between their figures and those collected by Census are described here.
- State and Local Tax Revenues. Data for aggregate state and local tax revenues in the identical format of the State Tax Revenue reports are available [pdf][spreadsheet]. Historical data from 1962-1993 also are available.
- Lottery Income. The propensity to spend on lotteries is higher for those with transfer income.
- Tobacco Taxes. State Government Tax Collections, Tobacco Products – Selective Sales Taxes in the United States (USTOBACTAX)
- Tobacco Taxes. Cigarette Taxes and Smuggling 2010 (Mackinac Center for Public Policy)
- The Federation of Tax Administrators maintains current information on state income tax rates updated annually:
- State Individual Income Tax Rates [excel version]
- State Individual Income Tax Federal Starting Points [excel version]
- State Corporate Income Tax Rates Table [excel version]
- State Apportionment of Corporate Income [excel version]
- Summary of Individual Income Tax Provisions in the States, 2011 tax year [Includes taxation of pension income] [Wisconsin Legislative Fiscal Bureau] [pdf file]
- The Federation of Tax Administrators maintains current information on state sales tax rates updated annually:
- The Federation of Tax Administrators maintains current information on state excise tax rates updated annually:
- State Motor Fuel Excise Tax Rates [excel version]
- State Cigarette Excise Tax Rates [excel version]
- State Taxes on Other Tobacco Products [excel version]
- State Distilled Spirits Excise Tax Rates [excel version] [U.S. map, January 1, 2015]
- State Wine Excise Tax Rates [excel version]
- State Beer Excise Taxes [excel version] [U.S. map, January 1, 2015]
John Diamond and George Zodrow. The Case For Corporate Income Tax Reform. May 29, 2013.