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LIQUOR: Legislative fix needed to protect consumers

Letter by David M. Ozgo, Washington, D.C. on May 4, 2012 at 2:12 pm with 12 Comments »
May 7, 2012 11:05 am

Re: “New liquor sellers fear fees threaten viability” (TNT, 5-4).

The article highlighting alcohol retailers’ concerns about steep tax hikes under the state’s new liquor system referenced a particularly insightful comment by Liquor Control Board Chairwoman Sharon Foster: “A legislative fix is your only fix.”

No one can know for certain what alcohol prices will be until Initiative 1183 goes into effect June 1. One thing, however, is for certain. Washington state had the highest alcohol taxes in the nation prior to privatization, and now even more taxes and fees are being added with the new system. It will be up to legislators to protect consumers and retailers during this tumultuous time.

Under the new system, consumers will continue to pay the 20.5 percent spirits sales tax and $3.77 per liter excise tax, and also two new taxes on gross receipts, including a 17 percent retail tax and a 10 percent wholesale tax. Taken together, the new effective sales tax rate on a bottle of spirits in Washington state will approach 100 percent on many purchases. Consumers will no doubt be left with a hefty tab.

Legislators should immediately begin considering a rollback of these confiscatory distilled spirits taxes which surely will overwhelm consumers, hurt the state hospitality industry and add to further lost revenue from cross-border sales.

(Ozgo is chief economist with the Distilled Spirits Council of the United States.)

Leave a comment Comments → 12
  1. Alcoholic drinks are a nice luxury that should be purchased and drunk in moderation. Luxury-level prices are OK by me.

  2. How much more right wing social engineering do we need to pay for?
    Privatization never works! It never will.

  3. Bandito says:

    The tax helps our state. The rest of the cost not so much.

  4. LornaDoone says:

    The proponents of privatization are already complaining about the taxation that was part of the intiative.

  5. Kluwer – privatization has a proven track record of moving funds away from the state and into private hands.

  6. amber424 says:

    Kluwer, privatization seems to be working rather well for other states, take a look around.

  7. Harry_Anslinger says:

    I’m sure Costco is ok with everything.

    Just do not privatize our prison system. Incarceration for profit is a scary concept. Talk about a slippery slope. The shady side of AZ Gov Jan Brewer’s ‘immigration reforms’ are her associations with friends who run private ‘correctional facilities’ that want hefty gov’t contracts to run the immigration detention centers.

  8. concernedtacoma7 says:

    Retail sales of a personally consumed good vs. prisons. Talk about apples vs oranges.

    Xring- exactly. Less money to the state, more money in everyone’s pockets. Private sector is more efficient. Before the progressives whine, we are talking retail goods here.

  9. CT7 –
    Booze or prisons – both are examples of privatization where higher prices + lower wages + minimal maintenance = money flows to the top where it goes to overseas, non-taxable accounts.

    Have yet to see a privatization scheme that helped low to middle income groups.

  10. RLangdon says:

    It’s about damn time!!!

    They taxed the crap out of cigarettes to get people to quit smoking. That worked!

    Now they can tax the hell out of booze to get people to stop drinkin’. OUT STANDING!!!

  11. now for the trifacta – tax gasoline to reduce useage.

  12. LornaDoone says:

    Pharmacueticals are sold retail, but there is still regulation.

    Just because taxes are lower, doen’t mean the cost will reduce. Retailers are real good at changing prices to meet the market.

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