What Alcohol Taxes Show Us about Taxation

There is bipartisan agreement about alcohol taxes. That means there should be agreement about all taxes.

I think the Newser.com headline is supposed to be humorous: “New Bipartisan Cause: Cheaper Tequila.” But the news is good for more than a laugh. It shows us that everyone knows that conservatives are right about taxes and the damage they do.

Consider how the Hill reports it: “House bill would make vodka, whiskey and rum cheaper.”

House Republican Todd Young (Ind.) has introduced legislation to reduce the excise tax on vodka, rum, gin and whiskey.

Excise taxes are paid when purchases are made on a specific good and often included in the price of the product.

The Distillery Innovation and Excise Tax Reform Act unveiled Tuesday would drop the current tax rate for distilled spirits from $13.50 per proof gallon to $2.70 per proof gallon on the first 10,000 gallons of productions for all distillers and then $9 per proof gallon after that.  

In a news release citing the Distilled Spirits Council and the American Craft Spirits Association, Young said more than half the purchase price of a bottle of spirits is used for taxes and fees, making it one of the most heavily taxed products in the country.

“All around southern Indiana, many new craft distilleries are popping up, creating jobs and adding to the tax base,” Young said. “But there’s a lot of red tape involved in getting a new distillery off the ground and this bill helps reduce that burden.”

Rep. John Yarmuth (D-Ky.) is co-sponsoring the legislation.

When Democrats tell you that taxation doesn’t hurt the economy, they are lying to you. They aren’t just wrong; they are telling you something that they know is wrong. The only reason to lower taxes is because politicians know that the taxes are hurting the distilleries.

[See also, “George Soros Avoids Taxes and Makes Billions.”]

Of course, that doesn’t mean that their new policy is right. Why should established businesses be weighed down with taxes so that they are at a disadvantage compared to new start-ups? Why not just reduce taxes for everyone instead of singling out a favored few?

In a joint release, the Distilled Spirits Council (DISCUS) and the American Craft Spirits Association (ACSA) said the new rates in the proposed legislation should apply to all distillers regardless of size and to imported spirits as well as domestic products.

That is absolutely correct. It is not the job of the government to make some businesses viable while hurting other businesses. Lower taxes help everyone.