Vinny DeMarco’s Beer Goggles

The well must be running dry from Vinny DeMarco’s tobacco funding, so now he once again is going to trot out the so called “dime-a-drink” alcohol tax that DeMarco is absolutely convinced that the General Assembly will pass this tax hike next year notwithstanding the opposition of both Bob Ehrlich and Martin O’Malley*.

There are two reasons why this issue is even in play. The first of course is Maryland’s bizarre and draconian policy as it relates to the regulation of alcohol; we are already familiar with Maryland state law as it relates to the direct shipment of wine and the inability of the General Assembly to change the law despite broad support from both sides of the aisle over the course of several years.

The other known known is that Vinny DeMarco is fundamentally ignorant on the interconnection of taxes, health issues, and actions taken by Maryland’s middle and working class families, as we have seen with some of his statements and positions as it relates to Maryland’s cigarette taxes.

But DeMarco and his neoprohibitionists went and got themselves a study from Johns Hopkins which indicates all sorts of curious things:

A December 2009 Johns Hopkins University study reported that in addition to raising an estimated $214.4 million in revenue, the tax would save the state $249 million in alcohol consumption related costs.

According to the study, the tax would reduce drinking by 4.8 percent, which would “annually prevent 14,987 cases of alcohol dependence, 37 deaths, 13 forcible rapes, 316 assaults, 21 robberies, 67 incidents of severe violence against children, and 19 cases of fetal alcohol syndrome.”

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The study of course suffers from the usual fundamental flaws of studies conducted to benefit certain public policy outcomes:

  1. Changes in behavior will make it impossible to estimate additional revenue from a dime a drink tax. While a dime a drink tax will likely be paid and noticed by out of town visitors who don’t know any better, the dime a drink tax may alter the fundamental behavior of social drinkers. Regardless of the estimated increase in tax revenues we do know one thing; that when taxes are raised, estimated increases in revenue invariably fail to meet expectations.
  2. It is impossible to estimate a reduction in the costs related to alcohol consumption because the people most likely to need those costs are not going to reduce their drinking.
  3. The crime and socail statistics seems to be laughably fabricate, particularly as it relates to alcohol dependency, fetal alcohol syndrome and violent crime. The study assumes that all of those crimes are related to drinkers who are solely consuming their beverages in a bar setting at which the dime a drink tax will apply and assumes that they will not be purchasing it at a retail store for home consumption.

Even looking at that two paragraph excerpt from the news story it shows statistical conclusions from two completely different outcomes. It projecting reductions in the cost of costs related to an assumption that the consumption of alcohol will decrease while at the same time projecting an increase in taxable revenues by assuming that the consumption of alcohol will remain at pretax levels.

If Vinny DeMarco thinks that any of these statistics are accurate, he should take some of his dirty tobacco money and buy a clue. Higher taxes are bad policy and exceptionally bad politics in 2010, and if he thinks that the votes will be there in the 2011 General Assembly session to pass this bid than he is more out of touch with political reality than even I thought he was….

* Though Rick Abruzzese’s statement about Martin O’Malley’s position on taxes (O’Malley “is not inclined to support any tax increase”) is laughable….

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