Booze Tax 50% Increase

625 Keawe St, Honolulu, HI 96813 (808) 537-3078

TESTIMONY 35 copies

COMMITTEE ON WAYS AND MEANS
Tuesday, March 26, 2002 9:00 AM
Conference Room 211
State Capitol
415 South Beretania Street

Description: HB2381 SD1
Increases liquor tax rates by 50%. (HD1, SD1)

Dear Committee Members:

We oppose HB2381 SD1 which increases liquor tax rates by 50%.

Do any of you honestly believe the the majority of the people of Hawaii want you to raise liquor tax rates by a whopping 50%?

Let us look at just some of the unintended consequences of this sky high liquor tax.

The effect on tourism. A lot of tourists will tell their friends about the highest adult beverage prices they have ever seen. Some of these friends are bound to be travel agents who will advise their clients accordingly. Consequentially, tourism, our primary industry will have, even more pain, inflicted upon it. Is this your intent? Instead of spending millions of tax payer's money to promote Hawaii, why not just abstain from passing laws that make Hawaii less attractive as a tourist destination?

The effect on employment. Reduced legal, consumption of liquor, will increase unemployment, in Bars, taverns, clubs, hotels, and retail liqueur stores. To make matters worse, this additional unemployment will further reduce revenues from sales and income taxes.

Another unintended consequence of raising the liquor tax will be reduced legal consumption and further expanding the consumption of untaxed illegal drugs and untaxed home made alcohol, which in turn, will further erode our tax base, while increasing profits for criminals. Higher profits for illegal activities, will attract even more criminals. Waikiki has already hosted several drive by shootings related to bloody turf wars.

There is also a health issue. Statistically, moderate consumers of alcohol are healthier, live longer, and are more productive over the span of their lives. A moderate consumer is defined as having between 2 and 14 drinks per week. Abusers consume more, abstainers less.

Such a large liquor tax increase, will shove some people from the moderate liquor consumers group, into the less healthy, abstainers group, which will further burden our already overtaxed health system. Some abusers most likely will switch to illegal drugs.

In summary, please oppose increasing liquor tax rates by 50%. Oppose, killing our tourist industry. Oppose, further unemployment. Oppose increasing profits for criminals. Oppose turning law abiding consumers of alcohol into illicit drug users. Oppose reducing the states net tax revenues.

Thanks

John Orendt

References

http://www.cato.org/pubs/journal/cj15n2-3-7.html

http://the.honoluluadvertiser.com/1999/Nov/18/localnews7.html