Delaware is the latest state to jump on the tax hike bandwagon with a plan to raise taxes on cigarettes and alcohol to bridge a looming budget gap. These so-called “sin taxes” seem to be the first place politicians go for some quick cash anytime they can’t pay the bills.
Take Action and urge your lawmakers to oppose tax hikes and pursue real long-term growth policies.
A recent proposal would raise alcohol taxes by two cents per 12-ounce can of beer, three cents per 5-ounce serving of wine, and 15 cents per bottle of liquor. The state cigarette tax would see a $.45/pack hike.
Delaware doesn’t need to go down the path of higher taxes that nickel-and-dime citizens. State legislators need only look up I-95 to New Jersey to see the effect cigarette tax hikes have on the budget. A Heartland Institute study shows that for two years running, the tax hikes have led to reduced revenues, not the millions the state was banking on.
New Jersey was left with a still gaping budget hole and businesses were hurt as smokers turned to the Internet, Indian Reservations, and the black market for lower priced cigarettes. This is a common scenario when legislators go after a minority of citizens for the funding woes of a state.
The picture is the same when you look at alcohol taxes. Raising those taxes hurts businesses as well. Already, the hospitality industry is bleeding jobs during this economic downturn. The last thing they need is higher taxes!
Governor Markell is hoping these proposals bring in over $20 million, a drop in the bucket when Delaware is facing an $800 million gap for 2010. But looking at other states who have tried the same tax and spend schemes, that money won’t be there and taxpayers will be again left holding the bag – only now with a much bigger price tag.
Take Action and tell your legislators to avoid these tax gimmicks altogether. Delaware has a great history of tax competition and economic liberty that has allowed that state to thrive. Keeping spending in check is a far better way to maintain long-term growth than going down the tax-hike road where other states have become stuck.