DC City Council Pushes for Higher Taxes on Consumers
Don’t just take ATR’s word for it. In today’s Washington Times, Michelle Minton of the Competitive Enterprise Institute highlighted the problems that a liquor tax increase would pose for low income workers just trying to make ends meet:
“The tax actually will be assessed on wholesalers in one large sum. The prices that wholesalers charge bars, stores and restaurants subsequently will jump. This initial increase in expenses will hurt the smallest bars and restaurants, which will try to recoup the losses by increasing the costs of their food and drinks.
This means two things: First, people who aren’t even drinking alcohol likely will end up paying for the increase. Second, wait staff and bartenders likely will see their tips shrink. Most customers calculate tips by rounding up – the “keep the change” method. If the cost of a drink increases by 6 cents, customers aren’t likely to alter their tipping math. Thus, the tax is coming almost directly out of the tips on which many service workers depend.”