So, what's the solution? In the latest episode of It's (Probably) Not Rocket Science, titled, "How a Higher Alcohol Tax Could Save Lives," a University of New Mexico (UNM) economics professor offers a data-driven answer: raising the alcohol tax.
"When a state increases alcohol taxes, it reduces alcohol-related fatalities," Brady Horn said. "It's pretty clear."
Horn, who also conducts research at UNM's Center for Alcoholism, Substance Use, and Addiction (CASAA), has spent years studying alcohol policy. His research shows that states that have increased alcohol taxes—like Illinois, Maryland and Alaska—have all seen a decrease in drunk driving deaths.
More than just spare change
New Mexico already has an excise tax on alcohol, charging producers around 40 cents per gallon. But according to Horn, that tax hasn't kept up with inflation, making it less effective over time.
"The real alcohol tax in New Mexico has shrunk considerably over time," Horn said. "We have less tax revenue, and we have less impact in potentially reducing negative consequences."
Horn suggests that increasing the excise tax or implementing an ad valorem tax—one based on a percentage of a customer's total purchase—could have a bigger impact.
"It turns out that ad valorem taxes have more bite," Horn said. "If you go to buy a six-pack at a store for $15, a 10% tax would add $1.50 to your total."
Another option? Taxing alcohol based on its alcohol content rather than volume or price.
"Cheap, high-alcohol beverages tend to be consumed in greater quantities," Horn said. "So, you could structure a tax to account for that."
Beyond the bar tab
A higher alcohol tax wouldn't just mean fewer DWI crashes. Horn's research suggests it could also reduce domestic violence and crime.
"Alcohol taxes differ from something like a sugar tax," Horn said. "Sugar is bad for the person consuming it, but alcohol, when consumed in an unhealthy way, affects other people. There are negative externalities—things like drinking and driving, crime, and domestic violence—that impact society."
New Mexico sees a disproportionate impact from alcohol-related harm. According to the New Mexico Department of Public Safety, alcohol is involved in 40% of all fatal traffic crashes. The New Mexico Department of Transportation also reported that in 2022, alcohol-involved fatal crashes hit their highest number in at least a decade.
"We used to be number one in the nation for alcohol-related fatalities, and to our credit, we are no longer first," Horn said. "However, we are still top five."
Sparking a policy shift?
Horn presented his findings to the New Mexico State Legislature last fall, where lawmakers are considering ways to curb the state's high rate of alcohol-related deaths.
"I can't imagine a legislator who doesn't want to reduce alcohol-related fatalities," Horn said. "The question is, how do we go about doing that?"
Still, not everyone is on board. Some critics argue that higher alcohol taxes disproportionately affect lower-income individuals. Horn acknowledges the concern but believes taxation can be an effective tool for encouraging healthier behavior.
"As an economist, I don't mind using markets to try to nudge behavior in good ways," he said. "It's not about prohibition. It's about adjusting for the harms that come with excessive alcohol consumption."
What's next?
Horn and his co-researcher, UNM graduate student Ana Paula Milan, are expanding their research to examine how alcohol taxes affect different types of drinkers.
"People who drink a lot of alcohol don't get nudged as much," Horn explained. "They are what's called inelastic consumers, so they don't change their consumption too much, partly because of addiction."
Next steps include looking at how alcohol taxes impact crime rates and other social outcomes.
To hear more about Horn's findings and how an alcohol tax could reshape New Mexico's drinking culture, listen to It's Probably Not Rocket Science, available now on all streaming platforms.
