Many tinctures are dissolved in Glycerol (E422). The advantage is that glycerol has a milder taste. The downside is that Glycerol dissolves only water-soluble substances.
In alcohol (ethanol) you get included both with fat-soluble and water-soluble substances in the herb. Thus, ethanol is the most effective way to dissolve all the essential oils, and bring out the full power of the herb.
Other advantages of ethanol are that the substances are very easily absorbed by the body. With an ethanol tincture, the absorption takes place in the oral cavity and the rest in the stomach, where all the essential oils are already dissolved, and ready to be absorbed.
The alcohol causes the tincture to go directly into the body, and the ethanol does not have time to pass the liver. Ethanol tinctures also have a long shelf life.
Ethanol tinctures also have major advantages over herbal pills. Herbal pills contain finely divided herbs in a capsule, which pass through the stomach to dissolve. Unfortunately, not all active substances in the herb are precipitated in the stomach, before the transport continues towards the intestine and out. Thus, not all of the active substances in the herb are precipitated and absorbed by the body.
This is why you dissolve a dried herb in hot water before consumption, or in ethanol. Then the body gets the essential oils already dissolved and can absorb them easily.