Consumer Costs and Job Impacts from State Alcohol Tax Increase of $0.25 per drink in New Mexico
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Who Pays?
Alcohol Use
- Excessive drinkers pay most of the tax increase.
- Non-drinkers pay nothing.
Income
- Excessive drinkers will pay the majority of any tax increase.
- Non-excessive drinkers in the highest household incomes would pay more additional taxes per year on average than non-excessive drinkers in the lowest income groups.
Employment Status
- Excessive drinkers will pay the majority of any tax increase.
Effects on Employment
- The funds generated by an alcohol tax increase are used to pay for general government services, or specific services, such as healthcare.
- The General Fund option above shows the estimated change in the number of jobs if the additional revenue from an alcohol tax increase were used to fund general government services, such as education and law enforcement.
- The Healthcare option shows the estimated change in the number of jobs if the additional revenue generated from an alcohol tax increase were used to pay for health care services, including doctors and nurses, prescription drugs, hospital care, and care in nursing homes or other long-term care facilities.
- Overall, alcohol tax increases generally result in small increases in employment under either of these options, even after taking into account the potential effect of tax increases on jobs that are specifically related to the production or sale of alcohol.
- Larger tax increases will also generally have a greater impact on jobs than smaller tax increases.