Alaska Legislators Urged To Abandon Alcohol Tax; Up to 400 percent Increase Proposed on Beer, Wine, and Spirits

3/21/2002

From: Bob Adams of The American Legislative Exchange Council, 202-466-3800; Web site: http://www.ALEC.org/

WASHINGTON, March 21 -- The American Legislative Exchange Council (ALEC) today urged Alaska state legislators to abandon a proposed plan to increase the alcohol excise tax by 200-400 percent on beer, wine and spirits, saying the tax will damage an already struggling economy and increase black market activity.

"Whether it's alcohol, income, or bubble gum, raising taxes is the wrong solution for working families," said Duane Parde, ALEC's executive director. "A larger alcohol tax now will harm Alaska's hospitality industry and reduce the number of jobs in Alaska. In this time of economic uncertainty, it's imprudent to add to the people's burden."

Many in this industry will be forced to cut overhead and eliminate jobs as a result of the tax, damaging an economy that is trying to recover from the economic downturn of the past few years, according to ALEC, the nation's largest bipartisan, individual membership organization of state legislators with 2,400 members nationwide.

Moreover, says ALEC, excise tax increases, especially of the magnitude under consideration in Alaska, risk an increase in black market activity. Instead of increasing the revenue available to the state, the tax increase could move a lot of liquor sales underground and increase criminal activity. In a state as big as Alaska, it's inconceivable that these sales could be suppressed without a massive increase in police activity.

"Excise taxes are also highly regressive, harming low-income families while hardly impacting wealthier families," said Chris Atkins, director of ALEC's Tax and Fiscal Policy Task Force. "Experts have estimated that 73 percent of the cost of the recent tobacco settlement -- a defacto excise tax increase - was borne by low income families. Other research indicates that lower income families pay as much as 1300 percent more, as a percentage of their income, on alcohol taxes than wealthy families."

Among the leadership of America's state legislatures, ALEC members hold an impressive presence: 32 Speakers and Speakers Pro Tem; 22 Senate Presidents and Senate Presidents Pro Tem; 22 Senate Majority and Minority Members; 30 House Majority and Minority Leaders. ALEC alumni include 9 sitting governors, 3 lieutenant governors, 2 senior-cabinet level positions, and more than 80 members of Congress.

For more information contact Bob Adams at 202-466-3800.