The (Almost) Return of Prohibition: California's Proposed 12,775% Alcohol Tax Increase


Posted by Brett Gall on Monday, April 5th, 2010, 4:12 PM PERMALINK


California nanny-statists are at it again. This time their cross hairs are on Golden State residents who enjoy a nice glass of scotch or wine at the end of a long day.

A ballot initiative proposed by Josie Whitney and Kent M. Whitney would increase the excise tax for hard liquor 2,703% (from $0.65 per 750 mL bottle to $17.57), raise the tax on beer 5,527% (from $0.11 per six-pack to $6.08), and a implement an astronomic 12,775% tax hike on wine (from $0.04 per 750 mL bottle to $5.11).  Proponents allege that this would result in between $7 and $9 billion in additional tax revenue for California’s Department of Alcohol and Drug Programs.
 
What does this mean in practical terms?  Your “Two Buck Chuck” would become a “Seven (or more) Buck Rip-off.”  No doubt, such a steep tax hike would adversely affect California’s esteemed wine industry.  According to the Wine Institute, in 2006 California’s wine industry had a $51.8 billion impact on the state’s economy and contributed $125.8 billion to the national economy.  The same study notes that the California wine industry generates 875,000 jobs nationally.  Given California’s jaw dropping 12.5%  unemployment rate, the last thing lawmakers should do is going after employers with such an onerous tax hike. Also keep in mind that Golden State taxpayers got hit with the largest state tax increase in U.S. history just last year.
 
Not only would the proposal to raise taxes on alcohol products kill jobs, it won’t rectify California’s budget deficit. According to the Sacramento Business Journal, California Secretary of State’s office “predicts that overall state and local alcohol tax revenue would shrink by hundreds of millions of dollars” as a result of this proposal.
 
The Alcohol-Related Harm and Damage Services Act of 2010 will require ~434,000 signatures to qualify for the ballot.  To qualify the measure, the signatures must be collected by August 23, 2010.
 

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