The Boston Globe is reporting this morning that Massachusetts Governor Deval Patrick has announced he will raise taxes on beer, as well as other alcoholic beverages (and candy and soft drinks):
Patrick would raise $75 million, for example, by increasing charges at the Registry of Motor Vehicles, including hikes of $25 for getting a title for a car and $2 to renew a license. Eliminating an exemption on the state’s 5 percent sales tax on alcohol, candy, soft drinks, and juice drinks would raise $150 million and be placed in a special health fund. (Administration officials have defined a juice drink as one that is less than 50 percent natural). Patrick would also expand the 5 cent deposit charge on carbonated sodas, beer, and malt beverages to include beverages such as water and juice drinks.
Is this an innocent attempt to raise revenue during tough economic times? Or is this an attempt by the government to impose ‘sin’ taxes, thereby imposing their morals as to what is right and wrong for private citizens to consume?
Maureen Ogle, historian and beer writer, sees a lot of neo-prohibitionists using the current recession as an excuse to push their anti-alcohol agendas:
Neo-prohibitionists will seize the moment, and prey on Americans’ insecurities. They’re already working to build a dry America one step at a time: A new local tax here, a more strict licensing regulation there; elsewhere programs designed to teach children to demonize, rather than respect, alcohol.
As the recession deepens, and turns to depression, we can expect new “scientific” studies demonstrating the dangers of turning to drink during hard times. Drys will blame alcohol for upswings in, say, crime or domestic violence, whose rates typically rise when societies are in turmoil.
Sin taxes are often seen as a precursor, (or sometimes an alternative) to outright prohibition. I don’t have a problem with moderate taxes on certain things, but I fear this may be a slippery slope.
Personally, I would rather see an increase in the gasoline tax. Right now, gas prices are very low. Raising taxes, even as high as $0.25 per gallon, would not make the price unbearable, but would generate a lot of revenue for the state. Prices were much higher over this past summer, and we all survived it. In addition, following the sin tax model, this would discourage people from buying gas-guzzling SUVs, which they barely need for braving the suburban jungles. Of course, I drive a hybrid, so maybe its just my smugness talking.
In this case, a 5% tax on alcohol is not outrageous. Basically, this just means that alcohol will no longer be subject to the exemption to the state sales tax that other foods enjoy.