Maryland Alcohol Sales Tax Increase Meant to Save the State From Hoodlums (er, not really)

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Maryland Alcohol Sales Tax Increase Meant to Save the State From Hoodlums (er, not really)
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Maryland Alcohol Sales Tax Increase Meant to Save the State From Hoodlums (er, not really)

Last night, I went out to eat with friends and family. We had a mix of drinks, dinners and desserts and split the final bill. I know the final bill total - close to $200 - and I know the tip amount. I did not once look at the tax on the bill. And I'm fairly comfortable saying that no one at my table did either.

The reality is that no matter how hard people scream about sales taxes during elections and budget crunches, sales taxes do not significantly impact spending. I think this is especially true on smaller ticket, taste preference items like food and drink. You tend to buy what you like and what you can afford based on the price of the item, not considering the sales tax.

Seriously. Name the last time you thought to yourself: I'd really like to order another beer but - ugh - that 6% sales tax is just too much.

You can't. Because you didn't.

And I'm willing to go so far as to say that many taxpayers aren't actually aware of the specific sales tax rate on alcohol in their own state. I'll admit a mea culpa on that issue. I had to go looking for mine and it wasn't easy. Excise taxes aside, it turns out that the sales tax on alcohol in Pennsylvania is the same as sales tax on other items (6% for most of the state, 8% in Philadelphia).

Yet, politicians and health care advocates are willing to continue to say with a straight face that an increase in the alcohol tax will positively affect behavior.

Hold on - it gets better.

Making headlines today are health advocates in Maryland who fought for an increase in the sales tax on alcohol. Those folks predict that the increase in sales tax on alcohol from 6% to 9% will reduce underage drinking and other crimes by decreasing alcohol consumption in the state.

Poppycock.

Increasing sales tax by 3 cents on the dollar won't do a thing to discourage underage drinking. Nobody can seriously believe that teenagers are sitting in a car, counting out change, plotting to buy drinks but for the new increase. Nor is someone who tends to abuse alcohol going to shove their dollars back into their pocket and skip going to the bar this evening because they can't afford the extra 3 cents on a dollar draught.

Let's be honest. Underage drinkers tend to drink cheap booze in order to get drunk. They're buying the Boone's Farm and Schlitz. They're not ponying up for a Grey Goose vodka martini or a nice glass of Cabernet.

Underage drinkers and drinkers who are apparently going to commit "other crimes" (whatever that means) are simply not the target of this new increase. You and I are. Folks who go out to dinner and have a nice glass of wine or head to the bar for an occasional happy hour are really who the General Assembly meant to affect with this bill. That's because it's all about raising revenue.

The increase is expected to generate $85 million in revenue in its first year. A majority of the revenue from the tax increase is slated towards alcohol awareness programs alcohol treatment centers rehabilitation efforts schools and school construction for the first year.

Listen, I get it. I believe in the importance of public education and I know that dollars are short these days.

But let's stop putting pretty labels on taxes and pretending they are what they aren't.

This isn't a statewide movement to curb abuse of alcohol. It's not a crime fighting initiative. It's not a concerted effort to combat underage drinking. It's not going to save lives. Heck, it's not even an attempt to raise funds for alcohol programs.

It's a tax. It's meant to raise money.

There's really no bigger story here.

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