Limited Taxation
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Barbara's Column
March 2001 #4

Joe Six-PAC is born

by Barbara Anderson

Tax fruit, yeast, sugar, grain, corn and potatoes.

These are the ingredients that make alcoholic drinks possible. Some people abuse alcoholic drinks; this abuse has a cost to society. So tax the ingredients to pay the cost.

You say that these foodstuffs also benefit society by providing nutrition that keeps us alive? You say that alcoholic beverages, taken in moderation, can prevent heart attacks and strokes?

I'm afraid you're missing the point.

The point is that some politicians want more of your money. Some other politicians want more of your money and also want to demonize beer. This latter group would have a psychological breakdown if it succeeded in discouraging alcohol consumption and thereby reduced the take from alcohol taxes.

By expanding proposals to raise taxes on alcoholic beverages to include all the ingredients that can be used to make alcohol, the tax-addicted politicians could get more money even if everyone stops drinking altogether. So let's just skip all the interim measures and tax everything that could conceivably be abused.

Tax fire, that is used not only for warmth and cooking, but by arsonists. Tax water, which if someone holds your head under, can drown you. Tax alcohol, which if abused can cause liver disease, drunk driving accidents, and life in the gutter. Tax food and use the revenue for obesity education programs.

Here's a reliable revenue source for you: tax political bull manure.

The latest provider of this renewable resource is state Senator Marion Walsh, co-chairman of the Taxation Committee. She wants to create a 5 percent sales tax on alcohol, and is joined by community groups who want the money for alcohol education programs.

At present, there is no sales tax on alcohol. There is instead a huge excise, which is paid at the wholesale level and simply passed on to the retailer and consumer in the price of the product. This excise was once the only source of government revenue. Government was a lot smaller then.

Now it's very big and feels entitled to grow every year. When voters rollback an outrageously high income tax rate, some politicians consider the slowdown in the rate of tax revenue growth a major tragedy. Having over-utilized the taxes on unarguably good things like income, property and household items, they reach out in desperation to increase what they call "the sin taxes."

Senator Walsh's proposal includes another hike in the tobacco tax, but this is an old story that's been told too many times: cigarette excise revenues are estimated to drop over two percent this fiscal year. If the new taxes pass, smokers will have even more reason to drive to New Hampshire to buy sin and while they are there, avoid the bottle bill and the Massachusetts sales tax on household items.

Some Beacon Hill politicians want to discourage this consumer flight; others have taken the "no new taxes" pledge; still others are disinclined to raise taxes with a turbulent election year coming up. So there will be a battle over the new sales tax on alcohol, with some opponents arguing that drinking in moderation is actually a healthy activity for non-alcoholics and should be encouraged, not penalized.

I was generally indifferent to sin taxes until my health-conscious son sent me Jane Brody's Good Food Book, in which she says that "on average, people who drink one or two drinks a day live longer and suffer fewer heart attacks than teetotalers."

Well, if it saves just one life.... so Citizens for Limited Taxation has formed a new political action committee -- Joe Six-PAC -- to support legislators who want to protect Joe from a heart attack. But it remains to be seen if they can sustain a veto against the politicians who are addicted to spending and who abuse their taxing power by making a scapegoat out of fermented fruit, grain and potatoes.

Barbara Anderson is executive director of Citizens for Limited Taxation. Her syndicated columns appear weekly in the Salem Evening News and the Lowell Sun; bi-weekly in the Tinytown Gazette; and occasionally in other newspapers.

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