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Initiative to Tax Alcohol Could Bring California Billions — That's Because Your Vodka Will Cost $17 More

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Photo by gagilas via Flickr

Photo by gagilas via Flickr
A new initiative that would increase the tax on alcohol was cleared for signature gathering today by the Secretary of State's Office. And it's not a modest tax increase, it's huge. Tax on a six-pack of beer would increase from 6-cents to $6.08. And say goodbye to two-buck chuck--a tax on a 750 ml bottle of wine would go from 4-cents to $5.11. And the tax on a 750 ml bottle of distilled spirits would increase from from 65-cents to $17.57.

The estimated $7 to $9 billion in state revenues it could garner would be given to Department of Alcohol and Drug Programs. Here's the full title and summary:

IMPOSES ADDITIONAL TAX ON ALCOHOLIC BEVERAGES. INITIATIVE STATUTE. Imposes an additional excise tax on alcoholic beverages, increasing the excise tax on each six-pack of beer from 11¢ to $6.08, on each 750 ml bottle of wine from 4¢ to $5.11, and on each 750 ml bottle of distilled spirits from 65¢ to $17.57. Requires additional excise tax revenues to be deposited into a special fund appropriated to the Department of Alcohol and Drug Programs to finance programs to address alcohol-related harms as specified. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: Additional state revenues of between $7 billion and $9 billion annually from an increase in state excise taxes on alcoholic beverages, with the proceeds going to support alcohol-related programs and services. A decrease in state and local revenues from existing excise and sales taxes on alcoholic beverages of several hundred million dollars annually due to a likely decline in consumption of alcoholic beverages. (10-0005.)
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Why tax alcohol? Co-authors Josie Whitney and Kent M. Whitney give a variety of reasons in their initiative (pdf). The first one says "alcohol-related problems cost Californians an estimated $38.4 billion annually, including the costs of illness and injury, the criminal justice system, lost productivity, impacts on the welfare system, trauma and emergency care, and the foster care system."

They also say the last time California increased taxes on alcohol was in 1992.

The Whitneys have until August 23rd to collect 433,971 signatures from registered voters.