Rushville Republican

News

December 24, 2013

Group proposes raising excise tax on liquor

(Continued)

“If the legislature and policy makers are willing to spend the political capital to make the case to the people that they need to raise taxes, anything is possible,” Howey said. “Falling into the trough of no-new-taxes is basically an evasion of reality. But it takes mature political leaders to make that case.”

According to the independent Tax Foundation, Indiana’s tax of about 7 cents on a six-pack of beer ranks it among the bottom 10 states. The alcohol tax rate hasn’t changed since 1981.

But the amount of beer that Hoosiers are consuming has changed. According to the state Department of Revenue, our taxable beer consumption has dropped from more than 127 million gallons in fiscal year 2009 to 117 million gallons in fiscal 2013. If you’re a beer distributor – and responsible for paying the excise tax – wouldn’t you be wary of any rise in cost?

Other states are tinkering with alcohol taxes. In 2011, Maryland pushed its alcohol sales tax from 6 percent to 9 percent. It was the first such increase in 38 years. In 2010, the State of Washington levied a temporary excise tax on certain beers, adding more than quarter to the cost of a six-pack. Illinois raised its alcohol tax in 2009 for roads and schools.

But similar tax increases have failed this year in several states including Hawaii, Maine, Georgia and New Hampshire.

Negangard said he understands legislators’ aversion to raising taxes, but he argues there’s a cost to be paid if local treatment programs aren’t funded. Low-level offenders are driving up the state’s prison population.

“They’re either going to have to spend money to build prisons or they’re going to have spend money on these programs,” he said. “You can’t just let people go without programs and expect crime rates not to go up.”

Maureen Hayden covers the Statehouse for the CNHI newspapers in Indiana. She can be reached at maureen.hayden@indianamediagroup. Follow her on Twitter @MaureenHayden

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