Despite their seeming love of big government, Maryland lawmakers have done one thing worthy of praise: they have has kept state alcohol taxes relatively low. According to the Tax Foundation‘s most recent report on excise taxes, Maryland’s wine tax is the is the 11th lowest, it’s beer tax is the 8th lowest, and it is tied with D.C. for the lowest tax on spirits. For Marylanders who value freedom, a nice glass of wine, an affordable sip of beer, or a shot of whiskey, this is is terrific news! But nanny statists don’t like it, and they are lobbying for change.
According to today’s Washington Post, the state legislature is considering steep tax hikes on wine and spirits. Allegedly, the funds would be used to help those in need, including the mentally ill, as the taxes could theoretically defray state health care costs. At least that is what the Maryland Developmental Disabilities Coalition suggested this week in testimony before a Maryland House committee.
But such advocates put too much faith in government. Maryland’s health care problems have nothing to do with low state taxes. Despite relatively low alcohol taxes, Maryland’s per-capita state taxes are among the top five highest in the nation, according to another Tax Foundation report. Feeding that beast more tax revenues won’t make state social services more effective, nor can residents be sure the revenues will be used for health care. Tax hikes more likely will increase government waste and prolong a sluggish economy–which hurts rather than helps.
MD proposed tax rates ($$/gal):
beer–1.16 (1,288% increase)
wine–2.96 (740% increase)
spirits–10.03 (668% increase)
If the tax increase passes, our state alcohol beverage taxes will be four times the national average for beer (highest in the nation; 2nd place Alaska at $1.07/gal), over three-and-half times the national average for wine (highest in the nation; 2nd place Alaska at $2.50/gal), and just shy of 50% higher than the national average for spirits (eleventh-highest in the nation; 1st place Washington state at $26.45/gal) [Source: the Jernigan paper referred to in the House bill preamble].
According to the Washington Post, change is unlikely because of “powerful alcohol lobby” in the state. Yet bigger lobbies have fallen under the weight of tax-and-spend politicians in the past. Still, consumers had better hope that the Post is right because it is they–not the “alcohol lobby”–who will be footing the bill.