Alright, I know with the lingering recession and its high unemployment, declining home prices, and dwindling 401Ks, even the most resolute baby boomer is tempted to down a drink or two. Recent actions by states such as Maryland, Tennessee, and Georgia show states are using alcohol taxes to bolster sagging tax revenues. Here are some recent changes:
- Maryland recently increased state alcohol taxes to 9%, the first such change in 38 years!
- Georgia voters will consider lifting laws against alcohol sales on Sunday.
- Tennessee may change existing laws allowing the Jack Daniels distillery to offer tastings, hoping to draw more tourists.
- Washington proposed laws to privatize their alcohol retail operations. These changes create revenue through the sales of state-run liquor stores and potential increased alcohol sales. Virginia is considering similar privatization.
- Connecticut, Massachusetts and several other states are increasing taxes on alcohol.
Sin Taxes
Cigarettes are also helping cut revenue shortfalls, with 33 states considering tax increases.
Why are cigarettes and alcohol seeing big increases in state sales tax? The reason is simple — because these products are seen as sinful and taxing them is seen as a way of discouraging consumption. They’re also seen as optional, folks can choose to just drink less and quite smoking. Thus, taxing them is more palatable than taxing necessities like milk and bread.
Sure, there are those, including the New York Times, who argue that states will provide less enforcement on underage drinking when they get significant revenue from it, but that seems pretty weak logic to me. I work on a college campus and can tell you that existing alcohol laws do little to curb underage drinking and providing a sip of Jack during a tour of the distillery is unlikely to create serious alcohol-related problems.
Your Turn
What do you think about increasing taxes and loosening laws on alcohol consumption? Do you think changes will cause more serous alcohol problems? Is it fair to single out certain products for extra taxes?





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