Thursday, January 6, 2011

Maryland's Dime-A-Drink Tax

Keep in mind...this is only in a proposal stage.  I am hoping it never comes to pass.

Reading some of the quotes in this story make it seem as if the politicians in our fair state here are truly concerned with our health. Of course they aren’t. This excise tax is just another revenue raiser, like speed cameras and cigarette taxes.  It would cost sixty cents more for a six-pack of beer, three dollars more for a thirty-pack.  Wine bottles would be assessed per six ounces; bottles of liquor would be assessed at ten more cents per ounce....and so forth.

Like both of those other forms of raising revenue, an alcohol tax would be regressive and ultimately counter-productive, especially if the alleged goal of reducing alcohol consumption is met. We’ll be stuck in the same rut that caused cigarette prices to rise to over six dollars per pack. I’m sure we are all looking forward to paying six bucks for a bottle of beer at the bar as well.  Someone has to pay for it, and it sure as hell ain't going to be the vendors and providers of the product.

Be careful what you wish for, Maryland legislators.


Doyler said...

They should absolutely do this.

The tax hasn't increased in nearly forty years. It would be a taxation of something frivolous, as opposed to taxing things that are mandatory, like food.

I don't think people will avoid drinking because of the tax. A dime is just about nothing, especially at a restaurant where the customer price of a beer is 3 dollars on average. Savvy restaurateurs that buy alcohol literally at pennies on the dollar could even advertise, "We pay that tax for YOU!!!"

Maryland did overdo it with their cigarette tax. They increased it by $2 a few years ago and $1 in 2010. It drove people to buy cartons in DC, VA, PA and W-VA because the tax became higher than the price of the product, and Maryland collected less revenue than projected.

However, a safe and sane tax increase is appropriate and can benefit the state.

Joshua Lattanzi said...

The problem, theoretically, isn't necessarily in the third party purchases of alcohol, such as at a bar or restaurant. What will suffer are the establishments that sell packaged alcohol.

I would rather them just say 'we are putting this tax on it because we want to control your behavior and penalize you for partaking in this vice'...but they won't do that, it will never get passed - except in San Francisco.

Doyler said...

Then the same marketing gimmick applies for the liquor store. Perhaps if the customer buys a brand at a high price point, the store pays the tax!

In the end, that $30 bottle of crown I buy will get my 32.50 instead. It happens. I may add a splash more Coke (prob the next thing to get taxed extra!) and it'll still taste pretty good.

Joshua Lattanzi said...

Yeah, but the store *always* pays the tax...they just pass it on to the consumer. McDonald's could just charge the actually dollar for their McChicken, but then they would only get 94 cents. They charge $1.06, so they still make their dollar on it.

Doyler said...

And the consumer will hardly notice.

McD's probably breaks even on that $1 sandwich. It's a loss leader to get you to go to the store, just like tax free Friday's on 18-packs at the liquor mart!

But hey, you can buy the higher APV and get more bang for your buck!

Joshua Lattanzi said...

We could just get into the philosophical debate over the wisdom of raising a tax during a recession. The MD legislature is also considering raising the gas tax.