Initiative Would Raise Alcohol Taxes Up to 12775%

One of the great pleasures of living in California is that, comparatively speaking, our alcohol laws and fees are not draconian. We don't have blue laws, liquor can be sold in normal supermarkets, and there are precious few moratoria on liquor licenses here in the Golden State. Alcohol is freely available and relatively cheap, and yet most people drink responsibly; our percentage of alcohol-caused accidents, for example, is 18th lowest in the nation, tied with Minnesota, North Dakota and Ohio.

Kent and Josephine Whitney of San Diego want to change that. They have introduced the "Alcohol-Related Harm and Damage Services Act of 2010" as a ballot initiative and are gearing up for petition signature gathering in hopes of getting this on the ballot in November. The petition needs just shy of 434,000 signatures to qualify.

According to Ballotpedia, the Whitneys allege that alcohol costs us $38.4 billion a year. $8.3 billion of this comes from additional medical, legal and prosecutorial costs, while the sale of alcohol brings in only $1 billion annually. Their solution is a 2700% increase in the excise tax for hard liquor (from $0.65 per 750 mL bottle to $17.57), a 5500% increase for beer (from $0.11 per six-pack to $6.08) and a whopping 12775% increase for wine (from $0.04 per 750 mL bottle to $5.11). The increased funding ($7 to $9 billion) would be funneled into the Department of Alcohol and Drug Programs.

This is Prohibition through taxation. The armchair libertarians must be having sedentary conniption fits from Yreka to Ysidro. Nowhere does it say that alcohol has to be a zero-sum game, not to mention the fact that the vast majority of those who do drink do so responsibly, which means you're taxing those who play by the rules to pay for those who don't.

The point of this story? If this initiative actually passed (which it hasn't a snowflake's chance in a blast furnace of doing), and the pot legalization measure did too, it would be cheaper to get high than drunk.

Alcohol abuse is a serious topic, but a 12775% tax increase in response is not something that should be considered seriously.

You can read the letter from the Whitneys requesting the California Attorney General's review here and the AG's response here.

------ AG RESPONSE -----

The Attorney General of California has prepared the following title and summary of the chief purpose and points of the proposed measure:
IMPOSES ADDITIONAL TAX ON ALCOHOLIC BEVERAGES. INITIATIVE STATUTE.

Imposes an additional excise tax on alcoholic beverages, increasing the excise tax on each six-pack of beer from 11¢ to $6.08, on each 750 ml bottle of wine from 4¢ to $5.11, and on each 750 ml bottle of distilled spirits from 65¢ to $17.57. Requires additional excise tax revenues to be deposited into a special fund appropriated to the Department of Alcohol and Drug Programs to finance programs to address alcohol-related harms as specified.

Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: Additional state revenues of between $7 billion and $9 billion annually from an increase in state excise taxes on alcoholic beverages, with the proceeds going to support alcohol-related programs and services. A decrease in state and local revenues from existing excise and sales taxes on alcoholic beverages of several hundred million dollars annually due to a likely decline in consumption of alcoholic beverages. (10-0005.)