North Carolina is among the states that are looking at “sin taxes” as a relatively easy means for increasing revenue – easy, so long as they can get by the powerful tobacco and alcohol lobbies. There’s just one thing wrong with sin taxes – they aren’t big enough.
That’s especially true with North Carolina’s proposed 5 percent increase in alcohol taxes. Last summer, when former governor Mike Easley proposed increasing the tax by the equivalent of four cents per can of beer, suds salesmen complained that it was too much. Tarheel tipplers already pay the fourth highest alcohol tax in the country, they griped.
But that tax is only 53 cents per gallon – equivalent to about a nickel per can of beer – and it has not increased since 1969. Inflation alone would have raised it fivefold by now. Several years ago, according a report by the North Carolina Budget and Tax Center, excise taxes on alcohol provided more than 6 percent of the state’s general fund in 1971. In 2004, it was just 1.3 percent. By now, it has to be even less. It’s about time the tax was raised, and it ought to be raised more.
I’ve never understood the appeal of either beer or booze, but I do understand this: drinking alcohol makes people do stupid things, tears families apart and sometimes kills people.
Adding enough taxes to discourage people from drinking may add some minor money to the state’s coffers, but as far as I’m concerned, that’s secondary. Every time somebody stays sober – who would have gotten drunk if he could afford it – it’s good news.
Sin taxes are a good idea – but they’re not yet a sufficiently big idea.