Kentucky Liquor Tax

A rant from myself and J.T. Dockery's Transylvania Gentlemen blog:

With the toll that the economy crunch is taking on American citizens, some cities and states are realizing that loosening restrictions on liquor is a good way to keep revenue flowing and boosting local economy.

Many cities are extending bar hours, and some places, like the entire state of Arkansas, are doing away with the "no liquor on Sunday" laws that should have never existed in the first place. According to Ben Jenkins, a spokesman for the Distilled Spirits Council, states that lift the ban on Sunday sales see a significant boost in sales annually.

Jenkins also notes, "Dozens of states consider alcohol taxes, and every year most of them fail because the legislators become educated as to the effects a tax increase on alcohol would have on the hospitality industry".

Unfortunately, given the choice between loosening or tightening Governmental grip on alcohol, between increasing citizen spending or suppressing it, guess which one Kentucky chose? Yep, you guessed it.

Several economists have noted that the key to getting ourselves out of this current economic toilet is to have money continually in motion, to get people spending, to keep bills circulating, by any means necessary. Splopping yet another malodorous tax on Kentuckians, many of whom are just barely getting by right now, is a sure-fire way to suppress spending, depress the morale of citizens, slow the economy down, and generally just screw things up for everybody.

A liquor tax during more affluent times, when the economy was booming and everyone was partying, would still have been a bad idea. But to do it at a time like this when people are struggling just to stay afloat... to tell the average Joe that he has to pay more for that bottle of cheap wine or that six pack of Miller High Life, which may or may not be the closest thing to a splurge, a luxury, or a treat they ever get in their existence... well, there's a word for people who would do that to Kentucky's citizens at a time like this. Several words, actually. None of which are printable here.

The not-inconsiderable Bourbon distillers of our fair state agree. They recently protested and poured bottles of bourbon on the statehouse steps in Frankfort. And there's been some rumblings about how some distilleries are even considering moving across the border to Ohio, Indiana or Tennessee. According to Jerry Rogers, owner of multiple liquor stores in Kentucky:

I simply cannot understand why the members of the Kentucky legislature voted into office by voters who live in "wet" counties would allow another increase in the tax on alcohol after a 22 percent increase just four years ago. This tax burden has been placed on only 50 percent of the population of Kentucky.

This is just fine for legislators from "dry" counties as there is no additional tax burden placed on their constituents, ensuring their re-election. The distillers have said that they may reevaluate their stake in the Bluegrass, and they very well may. Some distillers have already moved their aging operations out of Kentucky due to taxation. It doesn't have to be distilled here to be bourbon.

When this new 6 percent tax -- which is on top of a 11 percent wholesale tax, which is on top of an excise tax -- costs Kentucky its competitive edge, not only will Indiana and Ohio shoppers stay on their side of the river, but many Kentuckians will cross the river to do their shopping.