Proposed ‘Sin Tax’Will Hurt Our Economy
Wednesday - March 23, 2011
If you don’t already know, there is a bill on the move in the state Legislature to increase the taxes on all alcoholic beverages. This is one of the proposed increases in “sin taxes” that our elected officials are proposing in order to make up for the government’s annual budget shortfall. They had even proposed a tax on “sugared beverages” i.e., soda and energy drinks, which was appropriately shot down.
These were all proposed under the guise of allowing citizens of Hawaii to make a more “informed” decision about what we drink. But in the end, it is all about the taxes the state needs to balance the budget that are accrued through the sales of these products.
I see this increase on alcohol taxes, especially in the guise of creating a healthier environment for the people of Hawaii to make a more-informed decision, as misled and punitive against the alcohol industry that will result in a drop in overall food and beverage business.
The citizens of Hawaii are responsible enough to make their own decisions without the government trying to coerce them into making “better” ones. It is common knowledge that alcohol can have deleterious effects when over-consumed. This hike in taxes will not “inform” anyone of the effect of alcohol any more than common sense already does. It will only discourage people who are law-abiding consumers of wine, beer and spirits to lower their consumption and/or cease consumption of these beverages altogether.
Just think: Whatever bottle of wine you are buying now, just add a couple of bucks. That may not be much in the high-end market (which is still in recession), but for everyday imbibers, that adds up really quickly.
And by the way, has anyone seen gas and energy prices going up lately? That tacks on a few pennies too.
This will have a direct impact on the jobs and families of workers in the Hawaii alcohol industry. When wholesalers, distributors, importers, hotels, restaurants and retailers see their sales plummet as a result of this increase in taxes, they will try to cut costs, including labor costs (read: lay off workers). This is terrifying to me and my colleagues not only in Hawaii, but around the country, as it also will impact the thousands of people who are employed by the hundreds of wineries that sell wine here in Hawaii. Their sales also will slow and force them to seek other markets or cut costs - again, including labor.
Get the point?
Now, we all know how important our tourist industry is to the economic well-being of Hawaii. When visitors come to our Islands, they expect to eat, drink and have a good time. But when they see the higher prices in restaurants, bars, hotels and stores on alcoholic beverages they normally drink at home, they will have second thoughts about coming back or recommending Hawaii to their family and friends. I’m sure they expect things to be more expensive here in Hawaii, but they will see less value in coming to Hawaii if their hard-earned dollars cannot go as far as if they vacationed elsewhere. The result will be a decrease in visitor numbers and less revenue for private business as well as government.
In the end, the increase in alcohol tax will have negative effect on the economy of the state. Workers could be laid off and fewer visitors will come to Hawaii. No one likes taxes, but it seems that our government’s main solution to make up the budget shortfall is to increase them. Like any household, perhaps they should only spend what they can afford.
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