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.....• Video Lottery • MMBA |
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Alcohol Taxes StarTribune Editorial, April 5, 2010: Dan O'Gara, Pat Mancini: Tax alcohol, destroy jobs and businesses Bars, restaurants are already reeling from recession, smoking ban, wage hike. By DAN O'GARA and PAT MANCINI The March 28 editorial by Stephen Simon and Chelsea Becker urges Minnesota to increase the tax on alcohol – already the most taxed commodity in the state – to raise money for DWI enforcement. While all of us in the hospitality industry in Minnesota support aggressive enforcement of DWI laws, raising the tax on alcohol would have terrible consequences that would harm businesses statewide and punish law-abiding, responsible consumers. Simon and Becker would have readers believe that higher alcohol taxes are the logical answer to their bevy of statistics on the costs and social ills of alcohol. But several of their arguments relied on significant factual errors. First, they twice cite a 2001 Department of Health white paper that estimated the social costs of alcohol use in Minnesota. This document used highly arguable assumptions to calculate an exaggerated figure of the costs to the private and public sectors. The authors also claim that the alcohol tax “has not been increased since 1987.” This is only true of one of the many taxes levied on alcohol in Minnesota. In fact, alcohol is subject to federal taxes, a state excise tax, state gross receipts tax, state sales tax, and in many instances a local sales tax. The accumulation of taxes makes a glass of beer already more expensive in Minneapolis than it is in New York City. Without any further increase, alcohol taxes in Minnesota are already anywhere from 80% to 20% higher than all surrounding states. There are only three products in Minnesota that have an excise tax placed on them – gasoline, cigarettes and alcohol. Of these products, alcohol is the only one that is taxed again at the retail level. In addition, there are only two products in Minnesota – rental cars and alcohol – that are taxed at 6.875% for sales tax plus an additional 2.5% gross receipts tax. This makes alcohol the only product in the state that has an excise tax and a 9.375% state sales tax. Next, Simon and Becker erroneously suggest that a sales tax increase of a dime per drink would hardly be felt by consumers. They neglect to mention, however, that alcohol taxes are some of the most regressive taxes in the code. Furthermore, proposals that have been introduced in the Minnesota Legislature would increase costs at all levels, and these costs would be felt significantly by the public. For instance, the tax increases advocated would raise the price of a case of beer by $2.64! Minnesotans are not frequenting hospitality businesses as often these days. At a time when many restaurants and bars are struggling to survive the worst economic downturn in 80 years, we – along with our customers – cannot afford the burden of higher alcohol taxes. The state smoking ban and the increase in Minnesota’s minimum wage were hard enough for many establishments to endure. Higher alcohol taxes could be the last straw for countless restaurants and bars. In this tenuous economy, such a tax increase will undoubtedly cost many Minnesotans their jobs. Simon and Becker attribute all sorts of costs and social ills to alcohol, but in reality only a very small minority of people misuse alcohol and create problems for themselves and society. They ignore the fact that those who use alcohol in moderation experience health benefits, such as the lower risk of heart disease associated with drinking red wine. (And nowhere in the Department of Health’s white paper is this benefit calculated in economic terms.) Why should the vast majority of Minnesotans who consume alcohol responsibly bear these costs? There are many consumer goods that some people use improperly or in excess – ranging from automobiles to firearms to fatty foods – that create health or public safety challenges. But it would be deeply misplaced to burden responsible consumers and the businesses they frequent with excessive taxes. Adding a dime-per-drink tax is not the way to solve the state government’s fiscal problems, especially when it will worsen the economic nightmare for hospitality businesses in every corner of the state. MLBA Radio Ad from 2009 Opposing Beer Tax Hikes
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