Drink Tax
Across the country and at the federal level, lawmakers have proposed increasing alcohol taxes to pay for everything from budget deficits to construction projects to health care. Already, more than a third of the shelf price of alcohol comes from direct excise and sales taxes. The government earns $2 for every $1 earned by producers, wholesalers, and retailers!
Numerous economic studies have shown that increasing the already hefty tax load on alcohol sales will result in lost jobs. When the beer tax doubled in 1991, approximately 60,000 American’s lost their jobs. In that same year, an increase in the excise tax on liquor resulted in a decrease in federal alcohol tax revenue for the following five years and the elimination of 98,000 jobs. Consequently, states were forced to shell out $151 million in unemployment benefits—just one of the unintended consequences of tax increases.
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Many states propose alcohol taxes as a way to raise revenue for the state’s general fund. Here are some of the most outlandish and wasteful ways states and the federal government spend their tax revenue:
- $9.4 million federal grant to Search for Extra Terrestrial Intelligence Institute (SETI) in California to search for Aliens.
- $367,000 misspent federal funds on inflatable alligator and under-the-sea waterslides in Texas.
- $42 million to mail postcards to all taxpayers to inform them their federal stimulus checks would be arriving soon
