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Maryland's alcohol tax increase: How hard will it hit your wallet?

- Marylanders could soon be paying more to drink. (Photo: Associated Press)
For several years now, health care advocates in Maryland have pushed a tax increase on alcohol as the solution to the state's budget woes. This year's version, dubbed by its supporters as the 'dime a drink' bill, has more sponsors than ever before. Even powerful State Senate President Mike Miller, who earlier dismissed such legislation as "nonsense," has conceded some type of alcohol tax increase is going to pass this year.
At a rally last week, the executives of Maryland’s two largest counties — Montgomery County Executive Ike Leggett and Prince George’s County Executive Rushern Baker — rallied in support of the tax, pushing it as a modest burden that could help their counties' precarious fiscal situations.
"That's a modest increase, and for those who drink modestly throughout the state of Maryland, it will mean about $10 to your drink bill for the rest of the year," Leggett said, according to WTOP.
The actual cost of the proposed tax increase to the average consumer is contested. Retailers and restaurants have charged that the true increase would be much higher, 700 percent or more, depending on the drink.
A Leggett spokesman referenced statistics provided by Maryland Citizens' Health Initiative, one of the leading groups pushing the alcohol tax. A fact sheet put out by the group says the costs for moderate drinkers will be $10.83 a year. A staffer there referred us to Johns Hopkins public health professor David Jernigan, who helped them with policy research and has studied alcohol taxes nationwide.
Jernigan says the $10.83 figure was based on the Centers for Disease Control and Prevention's standard for low-risk drinking. On their website, the CDC references the Agriculture Department’s Dietary Guidelines for Americans, which recommends no more than one drink a day for women and no more than two drinks a day for men as a standard of moderation. Assuming each average man or woman drinks the maximum, the proposed tax would cost $73 a year for men and $36.50 a year for women.
That’s obviously much higher than $10.83 for either gender. But as Tim Naimi, a professor at the Boston University School of Medicine and former CDC official explained, that's the upper bound for low-risk drinkers. Most people don’t drink all seven days of the week, and plenty of men may only have one drink a day.
According to a different CDC report, 31 percent of Marylanders would fall into the low-risk, $10 category. Another 44 percent don’t drink at all. The remaining quarter are high-risk or binge drinkers. Jernigan estimates heavy drinkers would pay an average of an additional $158 per year.
So even Jernigan concedes some Maryland drinkers would see a dramatic increase in the price of alcohol. But, he argues, that's only because the current rates are so low. The legislation would increase the tax "from $1.50 to $10.03 per gallon for distilled spirits, from 40 cents to $2.96 per gallon for wine, and from 9 cents to $1.16 per gallon for beer." Those are increases of 569 percent, 640 percent and 1,189 percent, respectively. And the current rates are so low because they haven't been hiked in decades. Maryland hasn’t increased the tax on beer and wine since the 1970s, and hasn’t increased it on spirits since the 1950s.
"If you pay your son a penny a week, then you increase it to a dime, your son's not going go around saying he got a 1,000 percent increase in his allowance," Jernigan said.
Leggett was citing an advocacy group's numbers, but their study was backed up by official government statistics. His portrayal of the relatively low cost of the alcohol tax for modest drinkers earns an Honest Abe.
2 Comments
Paul Rinehart
If they pass this damn bill, its going to really hurt my business. I run a small brewery in Montgomery County and something like this could have a huge impact on my livelihood. If anything the damn politicians need to be taxed and regulated. They already spend enough of our hard earned money. This is a moronic tax, do they not realize that people will just go over the state line and buy their alcohol? I hope reality smacks these idiots in the face hard. I'm making a noise, so should you.
Merlin Rev. 68
When I moved here from Oklahoma I had quite a case of sticker shock (and still do - its as if it were Monopoly money out here). A night out already costs a considerable amount (taxis, food, drinks, tips). I'm a home-brewer so this new tax won't hurt as much as it could, but it will contribute to my staying in more and being anti-social :(. Or maybe it will cause more friends to come over and drink for free... Either way, commercial interests (besides my brewshop) will feel the effects.
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