Booze revenue could support state services
Published: Thursday, May 10, 2012
Updated: Thursday, May 10, 2012 22:05
No matter where I look in the news, I can always find stories and articles about the loss of social services and cuts to educational programs. There is not enough money in our state to fund these services. However, there is a way for New York to ease the burden.
The solution is simple: raise taxes. No, not school taxes or property taxes, but alcohol taxes. One product that stands the test of time, no matter what type of financial burden a person is under, is alcohol. From tall boys to handles of liquor, people will always have time and money for alcohol.
In New York, the current tax rate for beer is 14 cents per gallon. Spirits have a rate of $6.44 per gallon and wine is taxed at 30 cents per gallon. New York’s taxes are higher than 60 percent of the country. Yet, somehow, our state is always in financial ruin.
The federal government also applies a tax to our alcohol. Wine is taxed at a rate of $1.07 per gallon. Beer carries $18 per barrel, (31 gallons.) Spirits are taxed at $13.50 per gallon bottled at 100 proof. Because most alcohol is only 80 proof, the 80 proof bottles are taxed at a smaller amount.
The rates on alcohol should be increased to help fund our services. The state has already hit tobacco with substantial taxes, so why not do the same with alcohol? Even a small tax increase could help our state’s economy. New York could add a 10 cent tax per bottle of beer and a quarter per bottle of wine or spirits. People would barely even notice such a hike. And if they did, people would probably get over it pretty quickly.
According to the 2011 Annual Wine Industry Review, 347 million cases of wine were sold in the United States. An average case has 12 bottles in it, so an estimated four billion bottles of wine were sold that year. If they were taxed an additional 25 cents, it would be possible to bring in an extra $1 billion. The retail sales total for 2011 was more than $32 billion.
The annual beer sales in the United States totaled approximately $96 billion in 2001, according to the Brewers Association. It also reported that close to 200 million barrels were sold. Thirty-one gallons would equal about 330 12 oz. beers. That would mean that approximately 66 billion bottles were sold in 2011. At 10 cents per bottle, that would be $660 million in additional tax money that could be accumulated.
The simple math yields amounts that are substantial, but tax rates would need to be even higher to make a real impact. If the state would tax alcohol like it does tobacco, progress could be made in funding programs. This could mean a decline in sales, which would not be a bad thing.
Alcohol should be considered a luxury and taxed accordingly. The price of it now is so low that it is easy for a person to abuse it. Alcohol abuse and other alcohol-related problems are already being treated with state run programs. If there was a decline in use of these services because less people were drinking, the money for those programs could go elsewhere.
The amount of money that could be generated just from beer or wine alone would be staggering. Add in a tax on spirits, and there would be a lot more money to spread around to where it is needed.