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.
Instead of increasing taxes, Mr. Graham should re-examine proposals to increase the hours and days of alcohol sales. That would increase revenue while actually helping businesses.