City of Corbin Raises Alcohol Tax, Hurts Economy
Just this February, the General Assembly passed a new 6% sales tax on alcohol, which created a double-tax on a product the state already taxed at the wholesale level.
To add to the unfairness of the tax, it only applied to 30 of Kentucky's 120 counties.
Yesterday, the city of Corbin piled on.
In Corbin, where there is already an additional 6% tax on alcohol sales, they voted to raise the tax another percent. (The headline is here but the article doesn't match. The story on the increase is here.)
In April, when the state tax took effect, tax receipts fell 55% due to simple economic concepts, as illustrated here:
...The last time the federal government raised the distilled spirits excise tax, it took 11 years to bring in more revenue. And look at what happened with tobacco tax hikes. New Jersey raised the cigarette tax 17.5 cents in 2007. They collected $52 million less than they had projected and $22 million below what they collected before the tax hike. Maryland raised the cigarette tax $1, in 2007 sales dropped by 25% and there was a 254% increase in cigarettes illegally crossing state lines. When Arkansas passed a 56-cent tax hike on cigarettes in February, revenue projections were lowered by $14 million just one month after passage.
Hiking taxes hurts consumers and kills jobs - and doesn't even raise revenue. There's a good reason why friends don't let friends hike taxes.
