Should Alcohol Taxes Pay For Mental Health Programs? Do the Math

Improving the Mental Health System$5.25. When the numbers are calculated, this figures
According to a news release that was dated May 9,out to be 5% more than Pete would have spent
2006, the "Standing Senate Committee On Socialbefore the proposed tax increase. The point: since the
Affairs, Science and Technology" in Canadaproposed price increase affects higher-alcohol
recommended the creation of a Canadian Mentalproducts (such as shots) proportionately less than their
Health Commission that will be responsible forlower-alcohol counterparts (such as beer), why would
significantly upgrading the Canadian mental healthCanadians switch to lower-alcohol products?
system. As stated by Senator Michael Kirby, the ChairAlcohol and Mental Health
of the Committee, "The Senate Committee isAnother question. What if tens of thousands of
committed to improving the range, quality andCanadians, realizing that drinking alcohol is not good for
organization of health and support services that aretheir "mental health," significantly reduce their alcohol
required by the tens of thousands of Canadians whointake or quit drinking alcoholic beverages altogether?
are living with mental illnesses and addictions."Where will the money come from to offset this lack of
Funding The Proposed Changerevenue? In a similar manner, what if thousands upon
Based on an extensive three-year study on mentalthousands of Canadians who drink alcoholic
health and addiction, the Committee determined that itbeverages decide that they don't want to pay the
will cost $5.36 billion over a 10-year period for thisextra excise tax and, as a result, stop drinking alcoholic
mental health system upgrade. Where will these fundsbeverages? If this happens, where will the government
come from? According to the Committee, the revenueget the money needed to transform the mental health
will come from raising the excise tax on alcoholicsystem? In other words, does the Canadian
drinks by 5 cents per drink.government have a realistic "plan B" for this major
Part of the rationale for the 5-cent increase per drinktransformation?
was obviously the goal of raising the needed funds forA Logical Contradiction
the proposed changes in the mental health system.From a different perspective, isn't it rather ironic that
Another justifying factor for the price increase,those who drink alcoholic beverages will pay for the
however, was the fact that since each alcoholic drinkrevamped mental health system? Isn't there a
will cost more, Canadians will be more inclined to drinkcontradiction in logic somewhere in this proposal?
lower-alcohol products such as beer and wine insteadStated differently, if tens of thousands of Canadians
of liquor.have mental illnesses or are addicted to alcohol or
Let's Do the Mathdrugs, wouldn't the government want Canadians to
At first glance, this proposal seems to make sense.drink LESS alcohol in order to reduce the existing
Why shouldn't those who drink help finance a programalcohol abuse, alcoholism, and alcohol-related mental
that will provide them with a better mental healthhealth problems? Yet according to the current mental
system? Why not let those who are part of thehealth proposal, from strictly a financial standpoint, it
"problem" become part of the "solution"? This logicwould appear that the Canadian government is
seems sound until you do the math. If $5.36 billion isbanking the entire mental health system upgrade on
needed to help finance the upgraded mental healthhistorical data that strongly suggests that Canadians
system, then how many drinks will have to bewill continue to drink at their current or even higher
consumed in a ten-year period to reach $5.36 billionlevels of consumption.
dollars? The answer: 107,200,000,000 drinks. That's 107Budgetary Miscalculations
billion, 200 million drinks.What happens, for instance, if there are cost overruns
To arrive at how many drinks this is per year, all wein the proposed mental health system? There are, of
have to do is divide this number by 10 (for the ten-yearcourse, two "easy" solutions to this problem: increase
program) and the result is 10,720,000,000. This is still athe excise tax on each drink or motivate Canadians to
huge number that fortunately can be "massaged"drink even more alcoholic beverages. Either "solution,"
even more. According to The World Factbookhowever, is predicated on the fact that in order to
website, the population of Canada was estimated to"work," the upgraded mental health system needs to
be 33 million people in 2006. Dividing 10,720,000,000 bybe funded by Canadians who continue to drink
33,000,000 equals 325. Putting this in terms that thealcoholic beverages.
average person can understand, every man, woman,Conclusion
and child in Canada will have to consume 325 alcoholicIt appears logical to conclude that the Canadian mental
drinks per year for the next ten years to finance thehealth system is in need of a major overhaul. As with
new mental health system! Simply put, these numbersmost comprehensive government programs, however,
are not realistic.the issue of funding becomes a major obstacle to
More Flawsovercome. The proposed Canadian mental health
The "logic" of this proposed mental health programsystem upgrade is no exception. Based on the
also breaks down when it is examined more deeply.reasons given above, it seems obvious that the
For instance, why would people drink lower-alcoholCanadian government needs to come up with
products such as beer if the increased excise taxalternate sources of revenue generation for this
applies to all alcoholic drinks? To help understand thisworthwhile project. Indeed, to point out one of the
better, let's use an example. Let's say that themajor "flaws" in the current proposal, consider the
average shot in Canada currently costs $3.00 and thefollowing question: When is more drinking a "good
average beer costs $1.00. Based on the proposedthing?" Answer: when it finances a nationwide mental
price increase, if Joe drinks an average of 5 shots perhealth system upgrade. Something tells me that Andy
week, his weekly average alcohol expenditure will beRooney from "60 Minutes" would have a lot of fun
$15.25. When the numbers are calculated, this figureswith this.
out to be 1.7% more than Joe would have spentCopyright 2007 - Denny Soinski. All Rights Reserved
before the proposed tax increase. Let's do a similarWorldwide. Reprint Rights: You may reprint this article
exercise with beer. Based on the projected priceas long as you leave all of the links active, do not edit
increase, if Pete drinks an average of 5 beers perthe article in any way, and give the author credit.
week, his weekly average alcohol expenditure will be