Alcohol tax may be good politics, but it's bad policy

March 09, 2011

The alcohol tax increase may be good politics, as Vincent DeMarco says in his letter ("Dime-a-drink alcohol tax increase is good policy and good politics", March 8), but no one should be fooled into thinking it's good policy.

During the senate hearing on this tax hike that Mr. DeMarco's letter references, most of the testimony focused on the supposed benefits this tax hike would provide to people with disabilities. What the tax supporters failed to note is the legislation earmarks only 15 percent of the money to help people with developmental disabilities. Almost half of the new tax revenue would either go to fund an expansion of the state's already bloated Medicaid program or into the general fund.

Of course, even the 15 percent earmarked for developmental disability services won't likely end up in the final tax hike legislation. Odds are good that if the alcohol tax increase passes, all of the funding will go into the general fund with none being allocated to people with disabilities.

Another problem with those who testified in favor of this tax hike was their claim that it would reduce drinking in Maryland but have little effect on businesses selling alcohol. That is a ridiculous assertion — either the tax will be high enough to discourage drinking, which means less alcohol will be sold and businesses will suffer, or the tax will be low enough that alcohol sales won't decrease, which means there will be no reduction in Marylanders' alcohol consumption. Which is it? Tax proponents can't have it both ways.

Marylanders already pay very high taxes. There is no need to increase that burden by raising the alcohol tax.

Marc Kilmer, Salisbury

The writer is a senior fellow at the Maryland Public Policy Institute.

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