A Told You So Moment in Maryland


Posted by Will Upton on Monday, September 19th, 2011, 3:51 PM PERMALINK


The Maryland Tourism Council has an interesting post on the July revenue numbers from the recent increase in the state’s alcohol tax: 

Maryland raised approximately $6 million in July from the increase in the sales tax on alcohol (from 6% to 9%). If the new revenue in July turns out to be the monthly average, it would add approximately $72 million a year, less than the $85 million projected, when the increase was approved.

ATR sounded the alarm this past April, noting that the alcohol tax increase was poor policy.  Simply put, lifestyle taxes on alcohol and tobacco rarely fulfill their revenue projections and are neither a sustainable nor stable tax base.   When Washington, D.C. increased the city’s cigarette taxes, they actually saw a decrease in the cigarette tax revenues by 20-percent.   

Additionally, either Maryland Democrats have poor math skills or they simply just didn’t care as the alcohol tax forced restaurants and bars to increase their prices to create even change so as to avoid having to use pennies.  Can you think of the last time a bartender gave you back nickels, dimes, and pennies as change? 

The alcohol tax increase has been nothing but a raw deal for the already over taxed people of Maryland.  They now pay higher prices and taxes on their alcohol, all the while the state once again falls short of their “revenue projections.”  Unfortunately this is not the first time Gov. Martin O’Malley and Maryland Democrats have displayed their ignorance as to the dynamic impact of increased taxes.  The infamous Millionaires Tax was pitched by Gov. O’Malley as a measure to make top income earners pay their “fair share.”  In reality, all it did was cause the flight of top income earners and job creators from Maryland, while creating $100 million revenue erosion in the tax base.   

What do you think?  Should Marylanders push their legislators to repeal the alcohol tax increase?

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