Time and time again, ATR and taxpayer advocate groups point out that raising targeted taxes on specific goods (tobacco, alcohol, etc) results in consumers crossing state lines to find lower prices. And time and time again, legislators dedicated to taking more of their residents’ money ignore both the data and empirical evidence (see here for example).
In late July, the Massachusetts legislature voted to raise the state sales tax from 5 to 6.25 percent and apply it to purchases of spirits, beer, and wine for the first time (the state already imposes other higher taxes on alcohol beverages). The tax hike came despite the fact that neighboring New Hampshire has no tax on spirits or wine.
Yet, in a hypocritical turn of events, this week State Rep. Michael Rodrigues (D) was caught lugging three bottles of tax-free liquor and two bottles of tax-free wine out of a New Hampshire liquor store just north of the Massachusetts border. Rodrigues not only voted in favor of the tax hike, but sits on the powerful House Ways and Means committee that first wrote and approved the legislation. (See his car with an MA House District 29 license plate parked outside the store above.)
In order to make sure Taxachusetts can squeeze every penny out of residents, state lawmakers have also made it illegal to cross state lines with more than 3 gallons of alcohol purchased in another state, forcing consumers to pay their higher tax rate. After some media pressure, Rodrigues announced he would comply with that law and turn over a check to the state for the taxes owed.