Earlier this year, Maryland’s state legislature didn’t debate the need for an alcohol tax increase in so much as they debated between two tax hike proposals.
One proposal was a ten-cent tax increase on the retail product—the bottles on the shelves. Bars and restaurants would pay this tax when they purchased the alcohol to serve. The other proposal was a 3-percent tax increase on all alcohol final sales—this would be paid at the liquor store or by the patrons at a bar.
The Maryland legislature chose the second option. They pushed it as a compromise, saying they were not raising taxes as high as they could have. This turns out to have been predictably false.
Busy bars and restaurants are opting to cope with the tax increase by tacking on an additional 25-cents to their drink prices. This way, over-worked bartenders and waitresses will not have to count out odd amounts of change with nickels, dimes, and pennies.
Andrew Burke, the owner of a successful bar in Baltimore, said, “The guy at the bar isn't going to count out 86-cents while three more people are waiting for a drink.”
So with the 3-percent tax increase in effect Friday July 1st, patrons will be more likely to pay an extra 25-cents, so that the bar doesn’t wind up charging 3-cents per dollar.
Even a “compromise” tax hike will end up costing taxpayers more than originally advertised.
The worst part is Marylanders cannot even drink away their tax woes this time.