What effect do you think an increased alcohol tax would have on drinks particularly drunk by under 25s in UK?

Question

What effect do you think an increased alcohol tax would have on drinks particularly drunk by under 25s in UK?

"A tax on alcoholic beverages that are particularly consumed by under-25s is reportedly being considered as a means to curb "excessive drinking". Discuss the likely impact of such a tax with reference to the predictions and limitations of neoclassical analysis. Would you support this tax?"

This is the question I have to answer for an economics essay. What are your views? Any help would be greatly appreciated and if you could point me the way to any good articles, that would be great.

Answer 1

I am guessing the hope is that increasing the tax on alcohol would reduce the rate of drinking among the young. The logic being that young people have less money and thus could not afford as much to drink. I believe this is a false premise and would do nothing to curb drinking among the young.

Young people like to drink. It is part of British culture in fact. Drinks are already ridiculously expensive in the UK. When I was under 25 I would often find a large mixed drink costing five pounds (about $10 US). It was not uncommon to spend fifty pounds on a night out (about $100 US). I was not especially rich, nor an especially heavy drinker, but I would ensure that I had the money to go out at the weekend. As do millions of British teens and young adults.

If you continue to raise the prices of drinks, all that is likely to happen is younger people will gravitate towards cheaper alcohol sources. Worse, lack of affordable beverages may push certain young people towards drug abuse. Young people like to party, and like to get a buzz from drinking. If alcohol were taxed even more heavily than it currently is, young people may seek their buzz by taking prescription drugs, narcotics, OTC medicine such as cough syrup, huffing inhalants, and many other dangerous substances.

Drinking in the UK is already outrageously priced, yet people still do it. Trying to make it even more expensive will not achieve the stated goals, and it would affect law abiding adults who wish to enjoy an alcoholic beverage.

So no, I would not support any such tax hike.

Answer 2

Every man and his dog knows that increasing prices will never stop binge drinking. The only people who might be affected are those on a fixed income such as pensioners and I don't think they are the main culprits. Also, who and how can anyone work out that certain minimum prices per unit would prevent x number of deaths. Do these people come from another planet? What actual facts have these people used to prove their figures. They have stuck a finger in the air and decided oh that will sound good, lets say that. As every sane person with a modicum of common sense knows only a huge cultural change will even begin to come to terms with binge drinking or even just reducing the general level of everyday consumption. It is my opinion that the Government know this perfectly well and are just using this as a ploy to raise more tax.

Answer 3

Lets look at the elasticity of demand. Alcohol is considered addictive therefore it is inelastic in demand therefore it may not curb excessive drinking. It may work for casual drinkers but to excessive drinkers no effect.

Answer 4

I personally think that this approach will have little impact on the "problem" as younger people will still buy alcohol.
I do feel that it will become unfair to the people who do like a drink but do not get legless or cause trouble.

Answer 5

Grow a beard get a wooly jumper and start drinking real ale!

Answer 6

All drinks would have to be taxed as those who can't afford it would just buy the cheaper drinks! They're not stupid!

Answer 7

increased tax on alcohol would have no effect....and no, i would not support it.

Answer 8

Very little!

Answer 9

good idea