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Tuesday, February 17, 2009

The Government Never Buys a Round

Over the last few weeks Lyke2Drink has made mention of more than a few new tax proposals being introduced around the country that will cause the price of the drinks we enjoy to go up.

It's not that I'm some kind of conservative fanatic that believes all taxes are bad. In fact, I've voted for more Democrats and third party candidates for President than Republicans. Governments need money for programs like public safety, education and the health and welfare of citizens too young, too old or too sick to care for themselves. Unlike some recent appointees in Washington, I actually pay my taxes and I do so on time. However, I believe in most cases I do a better job spending what I earn to stimulate the economy and help social causes than the government.

A major concern is the way governments spend funds meant for one purpose on a variety of other programs, many of which don't have widespread enough support on their own to scrape up the votes for funding. Look at what happened to much of the tobacco settlement money back in the 1990s that was supposed to fund anti-smoking campaigns and health programs.

Now governments from one end of the country to the other are rushing to pass laws that increase taxes on beer, wine and spirits. The standard reason given is to fund alcohol treatment programs, which on the surface sounds like a good thing. The problem is that the statistics do not appear to show a sudden increase in alcohol abuse requiring a massive infusion of funding to pay for new programs. The reality is that most of these new taxes will never go to help a recovering alcoholic or support a family that has felt the impact of the disease.

Instead, when it comes to these new drinks taxes, the government is like one of those bar flies that is happy to accept a drink, but somehow always manages to disappear when it is their turn to buy a round. More importantly, this new wave of taxes will be heaped on what we already pay when we buy a bottle of beer, glass of wine or order a cocktail. Drinkers pay more than their fair share of these so-called sin taxes. (I hate that term by the way, since the Bible says Jesus turned water into wine. I tend to think having a drink is more of a holy experience.)

If you don't believe drinkers are already over taxed, consider these numbers from the Distilled Spirits Council of the United States on the amount of taxes collected on alcohol in 2006, the latest year that figure are available:

Federal Taxes:

Spirits: $4.6 billion
Wine: $877 million
Beer: $3.7 billion

State Taxes:

Spirits: $5.7 billion
Wine: $1.6 billion
Beer: $5.4 billion

Local Taxes:

Spirits: $529 million
Wine: $219 million
Beer: $1.09 billion

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