A committee in the Kansas House has started hearings on Governor Sam Brownback’s plan to raise alcohol and tobacco taxes to help fill a budget hole.
Richard Carlson, with the Kansas Department of Revenue, says they focused on alcohol and tobacco taxes because consumption taxes do the least harm to the economy.
“It is one of the very few consumption taxes on a product that is most discretionary for the consumer,” says Carlson.
But Jennifer Vogel doesn’t agree on the economic impact. She and her husband own two liquor stores in Kansas City, Kansas. Vogel says a tax increase could drive more shoppers into Missouri, which would hurt their bottom line.
“For us personally, it would be damaging not only to our business, possibly to our employees that we could lose due to loss of business, but to the industry as a whole,” says Vogel.
The alcohol tax increases would raise about $50 million over the next two years. Opponents say that could mean 7 to 10 percent higher prices on mixed drinks sold at restaurants and bars. They say the price of a case of beer would go up more than a dollar. Lawmakers will continue hearings later today (THUR), when they will focus on increased tobacco taxes.