Are Illlinois drinkers helping Missouri tax collectors?
Missouri’s grim revenue picture got even grimmer last month, with tax collections falling 16.3 percent below what they were in September 2008 — and revenue in September 2008 was lousy to begin with.
The only bright spot in Missouri’s revenue picture — and this is one of those good news/bad news things — is that people seem to be drinking more. We don’t mean beer.
The state’s revenue from its 6-cents-per-gallon beer tax was off a third to $725,476 in September 2009. Meanwhile, revenue from taxes on what the state calls “spirituous liquors” and wine was up 41 percent to $1,771,401.
Aside from a slight increase in tax receipts from foreign-based insurance companies, the liquor tax was the only revenue category to show an increase over September 2008. If it were all hard liquor, which is taxed at $2 a gallon, the $515,678 increase in tax revenue would translate to an extra 257,399 gallons of booze, or nearly 1.29 million extra fifth-sized bottles.
Wine is taxed at 42 cents a gallon. If the $515,678 all came from wine, it would mean Missourians drank 6.13 million more bottles of wine last month than they did a year ago.
One possible explanation: Liquor tax revenues were up only 8 percent of the first quarter of fiscal 2010, which began July 1 — with nearly all of the increase occurring not in July or August, but in September. What happened in September?
On Sept. 1, liquor taxes in Illinois, which already were higher than those in Missouri, went up dramatically. The tax on hard liquor in Illinois is now $8.55 a gallon, more than four times higher than in Missouri. Illinois’ tax on wine is now $1.39 a gallon, more than three times higher than Missouri’s.
Illinois now taxes beer at 23.1 cents a gallon, almost four times more than Missouri. But, as noted, Missouri’s income from beer sales last month was off by more than a third. Perhaps a $3 difference in the price of a bottle of vodka or bourbon is worth a drive across a bridge and a nickel or two extra for a six pack of beer isn’t.
Missouri Budget Director Linda Luebbering said she didn’t have the data to attribute the spike to Illinois drinkers — it might be a reporting glitch, she said — but she couldn’t rule it out.
Illinoisans are getting a massive public works program thanks in part to the higher taxes on liquor and beer. Missourians, unless they’re drinking all that extra booze themselves, could be getting a side benefit — a half million bucks a month in extra taxes.
It’s a tale of two legislatures: In Springfield, legislators raised taxes and invested in new schools, road and bridge projects, creating jobs and public benefit. In Jefferson City, tax increases are anathema. Missouri’s poverty rate has increased at more than twice the national average over the last nine years.
In Missouri, Gov. Jay Nixon already has vetoed or frozen $430 million in spending authorized for 2010. Based on the steep decline in state revenues in September, more cuts could be coming. After the state paid the refunds it owed, overall tax collections in the first quarter of FY 2010 were off nearly 10 percent, or more than $191 million.
More pain is on the way. Nobody can drink that much.
At least something is working for us! Many thanks to our valued Illinois customers for buying their liquor in Missouri.
So those Japanese and Korean Auto workers ain’t paying too much tax over here??? How about them COMMUNIST Chinese shoe factories and electronics factories??? GET IT YET!!!!!!!!!!!!!!!1
> Missouri’s grim revenue picture got even grimmer last month
With unemployment at a higher level than it has been since the Carter years, and with most state revenue resulting from income and sales taxes, why wouldn’t revenue decline? The problem is, when the economy roared and revenues were booming, those who wring their hands at today’s crisis were not asking the legislature to hold the line on spending and put the surplus into the rainy day fund.
> On Sept. 1, liquor taxes in Illinois, which already were higher than those
> in Missouri, went up dramatically.
And as those who rarely agree with the editors have often said, people respond to tax rates - or more precisely, to prices. Some in government, and their friends in the media, persist in the idea that you can raise taxes endlessly without influencing consumer behavior. But after adding a cent here, a half cent there, suddenly you’ll discover that people are going elsewhere to purchase their television sets and riding mowers. And before Illinois starts on that “massive public works program” they’d do well to consider that many Illinois residents may be purchasing their liquor in Missouri, Wisconsin, and Indiana.
> In Springfield, legislators raised taxes and invested in new schools, road
> and bridge projects, creating jobs and public benefit. In Jefferson City,
> tax increases are anathema. Missouri’s poverty rate has increased at more
> than twice the national average over the last nine years.
The esteemed editorialists at the Post-Dispatch are surely wise enough to be aware that correlation doesn’t mean causation. Of course, some of you may actually believe that larger government is what drives economic success. If that is the case, then California should have no poverty, with state and local government spending of more than $10,000 per person. In Missouri, they spend $6,800 per person, but our poverty rate is lower than California’s. New Hampshire spends but $100 more than we do, and their poverty rate is half. Mississippi spends over $7,600 a person, and has the highest poverty rate in the nation.
> More pain is on the way. Nobody can drink that much.
Indeed they can’t. Isn’t it time for another healthcare editorial?
Take you monthly pay. They already took out approx 40% before you get it. Then add up all of those ‘Little’ taxes. Sales tax. Gas tax. property tax, Personal Property. Next thing you know all those little taxes add up to 60% of you pay. How much is enogh? 70%? 80%?
Mr Kasoff is correct. If the left’s view of the world is correct why isn’t California - 25 Billion in debt, and Illinois - 5 Billion in debt working as planned? It has to be either too mmuch give aways and to big of a Govt. or not enough taxes. One or the other.
According to the Tax Foundation, a conservative research organization, the national average for combined state and local tax burden in all states is 9.7 percent. That is, after they pay federal taxes, Americans pay an average of 9.7 percent more to state and local governments. Liquor taxes are part of that. These taxes pay for every function of state government, along with local government functions like police and fire protection, streets, etc.
Missouri’s local tax burden is 9.2 percent, a half-percent below the national average. That ranks Missouri No. 32 among the 50 states.
Illinois’ local tax burden is 9.3 percent, .4 percent below the national average, ranking Illinois No. 30 among the states. (These figures are from 2008 and don’t take into account the higher liquor taxes).
Kevin - What does that mean? “combined state and local tax burden” Are you saying that all other taxes applied only add up to 9.7%? 9.7% of my gross income?
Because taxes, sales taxes in particular, are getting out of hand, I’ve started to track in Quicken how much I pay in sales tax on every purchase. I’ve been doing this for about a month now and I include everything from taxes paid at the grocery store, taxes paid for general items and taxes paid for dining out. BTW, sales tax for dining in some areas of the city are over 10%.
Because the voters of this city have not found a sales tax increase they don’t like, I’ve stopped tipping on the final amount and only tip on the subtotal prior to taxes. Sorry waiters and waitresses, you lose out.
For those who think taxes don’t matter, I’m telling you they do. They are at the point now where I actually think about where I’m going to buy something. I recently purchased truck parts online where I paid no sales tax. I did however pay shipping charges that came to almost what I would have paid in sales taxes. I don’t care. I’d rather pay shipping charges than pay one cent in sales tax and watch it wasted or defrauded away.
It is disappointing that there are seventeen states that confiscate less of their citizens’ earnings than MO. We need to keep pressure on the politicians for additional reductions in the waste, corruption, and largess that leftists like to call “investment”.
Lower taxes mean more business. Maybe soon, lower benefits will mean fewer parasites. Let CA, MA, and IL lead the way on “investment” spending and taxes. The socialists on the PD editorial board can whine and moan all they like. Missouri working people and business owners are paying enough in sin taxes to go along with the other “revenue” scams.
Can we get a few more of those “Impending Doom” climate change stories, please.
Eight years of a Bush/Cheney economy will drive many of us to drink.
How’s your 401K?
Thanks George.
Crash the Titanic and give the helm to Obama so the ditto-heads have something to complain about…In the meantime, economists estimated it will take 15 years to recover from what they did to us.