14 January 2010

Maryland encourages me to buy my beer in DC

Washington Examiner | Hayley Peterson | Lawmakers rally around 10-cent alcohol tax

Maryland lawmakers announcedplans for a 10-cent cocktail tax Tuesday -- equal to about $2.40 on a case of beer -- one day before the legislative session begins in Annapolis.

The dime-a-drink tax is expected to raise more than $200 million for the cash-strapped state of Maryland, which is now facing a $2 billion shortfall, said Del. Bill Bronrott, D-Bethesda, who is sponsoring the bill with state Sens. Verna Jones, D-Baltimore City, and Richard Madaleno, D-Wheaton.
(0) Why are they calling it a "cocktail tax" if it would apply to all alcoholic beverages? Could lawmakers or journalists be choosing names that sounds catchy without regard to their actual meaning?

(1) That's pretty damn regressive, right there. So much for these Democrats looking out for the poor. Percentage wise, I'm going to be paying about three times more for this tax on my High Life than Bronrott and his neighbors will for their imports. (Not that I don't enjoy an import from time to time as well, but I just got my W-2, and let me assure you it is not the W-2 of someone who habitually buys premium brands.)

(2) On the one hand they say this is needed to fill budget deficits, but on the other, they claim it's being used to expand Medicaid and mental health programs. It can't be both. When you're in a hole stop digging. Corollary: Stealing some dirt to fill in the hole is not an excuse to dig it deeper.

(3) I can't stand this habit of laying the costs of government on whatever subset of unpopular people legislators want to pick on. The deficit is the entire polity's problem, and it should be remedied by the entire polity. Don't lay it on the backs of people whose habits you don't happen to like.

(4) Nobody is making the claim that this is some kind of Pigovian measure to account for negative externalities of drinking. There is no reason to believe the societal costs of a beer are in excess of the taxes already put on them, necessitating a higher tax. This is just seizing an opportunity to take money away from unsympathetic people, like trying to make all banks, even those that didn't participate in TARP, pay for the losses the Treasury is taking from AIG and GM and Chrysler and politically-mandated mortgage modifactions.

(5) Assume for a minute this were a Pigovian tax. Such measures need reliable estimates of the externalities involved, which are notoriously hard to come by, as Alex Massie's debunking of a recent hyperbolic Scottish estimate shows. The very fact that these estimates always ratchet up, and are never adjusted downward, should be a huge red flag that they are baseless ways of justifying further seizures.

(Side note: Massie touches on something that's always bugged me — the presumption that a study done by a non-profit or government or university is inherently unbiased, while one commissioned by a corporation couldn't possibly be trusted, as if profits are the only possible things that can sway what people say. I don't know how such an obviously false idea could have such legs. It's as if the people who believe this have never been in an argument before, or even a conversation. What monetary profit do I gain by being the guy at the bar who's caught the biggest fish? None. And yet I swear to you I got one last summer that was thiiiiiiiiiiiiiiiiiiiiiiis big.

People lie for all sorts of reasons. This is indisputably true. And yet people will take the word of a not-for-profit study as according-to-Hoyle truth, as if the authors would never have fibbed for professional gain, or to boost their reputation, or to secure a grant, or to get their way, or to avoid having to admit their world-view is flawed, or to be invited to the popular cocktail parties. Can we please spread the cynicism around a little more evenly?)

(6) I now have yet another reason to buy my hooch at Paul's Wine & Spirits, just on the far side of the MD-DC line. Paul's, unlike the horrible stores in my county, which are all government-run, actually works hard to attract new customers, host educational events, hire knowledgeable staff who are helpful and positively overflowing with hustle, and goes out of their way to find or order whatever you want that may not be regularly stocked. Maryland is about to hand me one more reason to patronize Paul's.

(7) I thought this was a hoot:
Numerous [Maryland] lawmakers have pledged to avoid raising taxes in an election year.
That should read: "Numerous lawmakers have pledged to avoid doing things which may make them unpopular, but are fine with doing those things as long as the silly voters will forget about them before it matters." Sleezeballs.

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