Increased U.S. Tax on Beer

The column (Editorial Pages, Oct. 28) by economists Martin and Kathleen Feldstein advocated increasing the federal excise tax on beer as a method of reducing traffic fatalities, particularly among teen-agers. As is the case with so many schemes to manipulate behavior rather than shape it through legitimate education, this proposal would fail to achieve its stated goal. It would, however, generate numerous unexpected results.

The Feldsteins assume that underage persons who already risk arrest and loss of driving privileges if caught drinking will alter their behavior rather than pay extra for a six-pack of beer. This ignores the fact that teen-agers are notoriously insensitive to cost, gladly accepting premium prices for the most stylish clothes or most popular record albums.

Thus, while the type of tax increase advocated would indeed cut consumption, the decline would not be seen among underage, abusive or alcoholic drinkers. At most, such groups would switch their purchases to lower-quality, lower-priced products.

However, responsible consumers--who constitute the vast majority of beer drinkers and who are sensitive to price fluctuations--would cut their purchases dramatically.

Finally, the highway safety record in the United States outlined by the Feldsteins is not nearly so bleak as they have indicated. For example, it should be noted that in 1985 the fatality rate per 100 million miles of travel was the lowest rate on record, according to a May 1986 report by the Department of Transportation.

The same study reported that “the greatest change by driver age and sex was a 5% decrease in fatal accidents associated with teen-age males.”

It is essential that these improvements be continued. Equally vital is that we have the good sense to trust in education, not artificial price increases, as the best method for achieving a long-term solution to this problem.

JAMES C. SANDERS

President

The Beer Institute

Washington