WBUR Massachusetts Alcohol Tax Interview

Monday, October 25, 2010

Last Thursday, Curt Nickisch from WBUR (a Boston National Public Radio station) came over to do an audio interview about Question 1 of the upcoming election which would repeal the 6.25% sales tax on alcohol in Massachusetts.  We had some minor audio difficulties so I hope my part of the 4 minute piece doesn’t get edited out of the story as a result, but I wanted to share some thoughts on the issue before listening to the to the story on the radio myself.

What’s strange about this issue for me is that I’m not really trying to sway anyone’s opinion or urge anyone to vote either way.  I consider myself independent and moderate politically.  I’m not even really that politically-minded come to think of it.  I am, however, disappointed with the lack of useful information provided to date on this issue by traditional media outlets.  So far, the collective coverage I’ve found was long on opinion and short on information which is the exact opposite of what I’m looking for.  What I’m looking for is some information that I could use to make an informed decision.

For example, the most common reason supporters give for keeping the sales tax on alcohol is that the revenue raised goes to programs that help residents with behavioral health problems.  I’ve heard conflicting statements on this important point as to whether the money goes exclusively to this cause.  It’s entirely possible that the state has no means for separately collecting and disbursing funds in this manner and the claim is a total fabrication.  I honestly don’t know whether it’s true or not.  What I would like is someone with more familiarity with the state’s finances to do some research and fact check the claims I’ve heard and then share that information.

On the other side of the argument, retailers say their business is suffering.  Yet we hear the tax has raised more revenue than anticipated.  That alcohol sales are brisk.  How about some data from the Massachusetts Department of Revenue showing sales trends by volume and dollar over the past few years?  Overlay it with location and we’d have something to think about.

But instead we get high level rhetoric boiled down to a useless opinion built on a shaky foundation.  Maybe this is the way politics always work, and maybe that’s why I usually focus my attention elsewhere.

For my part, I compared current Massachusetts excise taxes to other states and found they were on the average-to-low side.   The Twitter account representing those in favor of maintaining the tax chose to share that data out of context with no attribution.  I didn’t appreciate that because I shared my (admittedly simple) research in the context of an overall story on the issue that doesn’t come through in isolation.  Why didn’t they do their own research?  What if my interpretation was incorrect?

I fear this vote is coming down to an either/or decision:  Support behavioral disorder programs -or- support package store owners.  If that’s the case, those in favor of repealing the tax are in trouble.  But how did the discussion come down to that?

What the discussion should be about is determining the appropriate level and means of taxation (excise vs. sales) in the context of our state’s overall budget.  I think knocking down the general sales tax rate from 6.25% to 3% (Question 3) is a pipe dream.  Others disagree.  Why don't I favor reducing the state sales tax to 3%?  Because the state sales tax rate was at 5% and things seemed to be working just find at those levels for a number of years.  Just as with alcohol sales tax it seems to me that something should need to change (other than the economy being in the tank) to justify changing taxation levels.  The state needs to spend less when times are tight just like the rest of us.

So where does that leave us?  My thoughts are on other things that conspire against Massachusetts wine consumers.  Things like stifling interstate shipping laws, a general lack of consumer-friendly competition annoyingly held in place by the three-tier system and other antiquated Massachusetts laws.

Stay tuned for more on that in the future.

In the mean time, here’s a link to the story on WBUR.

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