The United States Senate is considering imposing a tax on beer, wine, and hard liquor. The Massachusetts State Senate is considering a similar proposal. As you might expect, this is making some people very upset.
Of course, nobody likes paying taxes. I don't think there's a person alive who greets news of a tax increase with a smile. But there's a reasonable argument to be made in favor of the alcohol tax: that its burden will be borne disproportionately by problem drinkers, the same people whose alcohol-related health problems will later account for a disproportionate amount of state- and federally-funded health care. That makes sense.
On the other hand, the problem with consumption-based taxation is that it nearly always puts a greater burden on the poor. Consider two moderate drinkers, one who makes $30,000 a year, and one who makes $300,000 a year. They may spend exactly the same amount of money on drinks (without ever being a liability to the health care system), but the tax increase accounts for a much greater percentage of the lower-income person's spending. (That's the reason why necessities, like grocery items and non-luxury clothing items, are exempt from the sales tax in most places.) The rich can absorb this increase; the poor can't.
Still, if taxing alcohol causes overall consumption to go down, that's a good thing, right? People will be healthier, drunk driving incidences will go down, and you may even see a decrease in assaults and vandalism. Sure, but what if you own a liquor store? What if your revenues decline and you have to lay people off? In economic times as dire as ours, you can't make a bad situation worse.
As usual, I don't have the answers. Even thinking about the questions makes me less and less sure what I really think. What do you think? Is taxing booze a good idea or not?