UMaine Economist Calculates Tax and Job Impacts of New Beverage Taxes

care 2 network ^ | 10/6/08 | Todd Gabe

[Fed Up With Taxes]

ORONO Maine's new beverage taxes, at the heart of Question 1 on this November ballot, will cost Maine businesses and households as much as $40.7 million annually in higher taxes on beer, wine and nonalcoholic beverages, according to new research by University of Maine economist Todd Gabe.

These taxes, imposed by Public Law 629, also would result in the reduction of $17.5 million in beer, wine and soft drink net sales revenue. Including multiplier effects, the total economic impacts are an estimated reduction in sales revenue of $26.3 million statewide, with a loss of 395 full- and part-time jobs that provide about $8.8 million in income, according to Gabe.

[Fed Up With Taxes]

"These total impacts are spread across the entire Maine economy, but concentrated in restaurants and bars, retail stores and other companies that sell and distribute beverages," he says.

"Many people might be tempted to combine the $40.7 million in additional taxes and the $26.3 million in reduced sales revenue into a single impact figure. But that would be comparing apples and oranges," Gabe said. "They are different types of impacts, but the bottom line is an increase in the price of beverages and a loss of sales revenue to the beverage industry."

Gabe�s study on the fiscal and economic impacts of the beverage tax was commissioned by "Fed Up With Taxes," a coalition of businesses and individuals, and several associations representing stakeholders.

The report does not take a position on Question 1, Gabe says. "It simply estimates the effects of the new law on beverage taxes, as well as the economic impacts of the statewide reduction in beverage sales revenues associated with the tax hike," he says. "Other aspects of the law need to be considered to make a judgment about whether Public Law 629 is good or bad for Maine."

The intent of the study is to inform the debate on Question 1 the repeal question on the upcoming ballot, Gabe says.

"This kind of information is important for voters to consider," he says. "It's a lengthy report, but the majority of it is about how the numbers were generated."

Gabe can be reached for comment at (207) 581-3307.

[Brookhaven]

Maybe now we know why McCain added resources to Maine.

Anytime there is a tax increase on the ballot, the anti-tax people show up to vote. Anti-taxers tend to be Republican.

If the vote goes more heavily Republican in Maine than expected, this could be part of the reason.

[Koblenz]

Maine has the weirdest taxes ever. They’ve had or have this beverage tax, there as a snack tax, there’s a tax on puppies and kittens, etc. I mean, the tax people there must not give a damn about PR.

[Thunder90]

Is Maine increasing its bottle deposit to 10 cents???

[andy58-in-nh]

Maine is a formerly great state, still a beautiful place but one that has been utterly destroyed by moonbats from New York and Massachusetts. Maine now has the highest tax per capita burden in the country - worse than California. The Liberal Locusts fell in love with L.L. Bean’s duck boots but decided that two of the state’s core industries - logging and fishing - were evil and had to be stopped. And as farming has declined to be profitable (thank Congress for effectively subsidizing foreign competitors), the native-born population has declined relative to the influx of non-native loons. I like the original loons better. I still hope to retire in Maine, but it’s going to take a lot of “cleansing” first.