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Legislative

Alcohol Tax Policy Option Could Cost Industry Thousands of Jobs

May 19, 2009


Source: DISCUS

The Distilled Spirits Council today called the Senate Finance Committee policy option to raise alcohol taxes a prescription for disaster for the hard hit hospitality sector.

"At a time when the hospitality industry has been hammered by 10 percent unemployment, an alcohol tax hike would be a prescription for economic disaster," said Mark Gorman, Distilled Spirits Council Senior Vice President who noted that since April 2008, nearly 450,000 jobs have been lost in the hospitality industry.

"Forcing hundreds of thousands of waiters, waitresses, bartenders and busboys into the unemployment line is not the way to reform our nation's healthcare system."

Further Gorman noted, when the federal excise tax on spirits was raised in 1991, tax revenues actually fell and it took 10 years before they regained their pre-1991 levels.

"If the tax revenue history is any guide, and the end result is hundreds of thousands more unemployed workers, you have to ask yourself what is the point," said Gorman.

Distilled spirits are already one of the highest taxed consumer products with approximately 60 percent of the price of a typical bottle going to taxes.

The federal excise tax on alcohol is one of the most regressive taxes imposed on any American consumer product with half of spirits, beer and wine in the U.S. consumed in households earning $50,000 or below.

According to the Congressional Budget Office, an alcohol tax increase "would make a tax that is already regressive — that takes up a greater percentage of income for low-income families than for middle- and upper- income families — even more so."


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