ATR's Taxpayer Protection Pledge has been a useful tool for voters curious about their candidates' stance on taxes. By making a written commitment to constituents to oppose and veto or vote against all tax increases, candidates give comfort to those who believe taxes are already too high and government is too large and oppressive. Eight governors and nearly 1,100 state legislators across the country have signed the Pledge, in addition to countless 2010 challengers.
But in Maryland this week, nanny staters are pushing an entirely different pledge to state legislative candidates. The Maryland Citizens Health Initiative is asking candidates to sign a pledge promising to raise the state liquor tax by 10 cents per drink. They are attempting to convince candidates that not supporting a tax increase in the run-up to November will "cost them votes."
Blinded by their pursuit of control over the lives of private citizens, this group is completely oblivious to the fact that running on tax increases in this election cycle is a losing proposition. Polling done last week shows that 44 percent of Marylanders believe the economy is in bad shape, with only 11 percent rating it as good. The solution? 57 percent of Marylanders believe cutting taxes is a better way to create jobs than increasing government spending.
And government spending is the primary motivation for this tax increase. Advocates estimate (optimistically) a $249 million revenue increase for state government to spend on a variety of new programs. Health groups are marketing this tax hike as a public health initiative, but other members of their coalition belie that fact. Big government organizations like the Service Employees International Union and AARP are also urging candidates to sign the tax increase pledge.
While they are wrong to push tax increases as a positive campaign issue, they are also incorrect about the policy implications of a tax increase on alcohol. For starters, alcohol taxes are unstable sources of revenue, as people tend to consume less of a good when its price is increased. This is true at both the federal and state levels. When the feds raised taxes on spirits, wine and beer in 1991, revenue fell $2.4 billion short of projections over the next five years. In Kentucky last year, associated revenue declined 55 percent just one month after an increase in the excise tax on alcohol. Alcohol is alreadly overtaxed – taxes make up roughly one-third of the shelf price of a bottle of booze.
Now is not the time to raise any taxes, on alcohol or otherwise. Marylanders have weathered an onslaught of tax increases in recent years, and polling suggests they have had enough. This November, voters will take a long look at candidates' stances on government spending, taxes, and jobs. If nanny staters think written promises to raise job-killing taxes will help their chances in November, more power (pardon the pun) to them. For those interested in paring back state government and reducing the tax burden, be sure to check out the list of Taxpayer Protection Pledge signers.