Heartland Institute Reacts to Cook County Alcohol and Tobacco Tax Hike Votes

November 14, 2011

A committee of the Cook County Board of Commissioners on Monday approved a 50 percent hike in alcohol taxes, from 6 cents per gallon to 9 cents per gallon, and an extension of the cigarette tax to other tobacco products, such as smokeless tobacco, roll-your-own, and cigars. A final vote is expected this week.

The following statements from budget and tax experts at the Chicago-based Heartland Institute may be used for attribution. For more comments, refer to the contact information below. To book a Heartland guest on your program, please contact Tammy Nash at tnash@heartland.org and 312/377-4000. After regular business hours, contact Jim Lakely at jlakely@heartland.org and 312/731-9364.

“Cook County already has some of the highest tax burdens in the nation. Almost 60 percent of the cost of every bottle of distilled spirits sold in Cook County already goes to taxes and fees. To raise taxes on alcoholic beverages would make it even more difficult for people to afford to do something as simple as enjoy a drink at a restaurant. It would also invite people to cross county and state lines to avoid paying sky-high Cook County taxes, which would reduce the number of jobs available in the county.”

Steve Stanek
Research Fellow, Budget and Tax Policy
The Heartland Institute
Managing Editor
Budget & Tax News

“It’s difficult to see actions to raise alcohol and tobacco taxes further as anything but an effort to get more revenue. If anyone tries to justify this as a public health measure, they’re simply wrong. The public health research shows higher alcohol taxes can slightly discourage moderate drinking, which, by all accounts, is not harmful. Tax increases have no consequence with regard to serious alcohol dependency or drunk driving. While tobacco taxes can discourage tobacco use--which is, indeed, quite harmful--they are not very effective relative to other public health measures that cost far less and impose a far smaller burden on people at the bottom of society.”

Eli Lehrer
Director, Center on Finance, Insurance, and Real Estate
Vice President, DC Operations
The Heartland Institute

“The Cook County board’s committee approval for raising regressive sin taxes on alcohol and tobacco is more evidence that they are not ready to make the tough decisions to fix the county’s fiscal situation. This regressive tax increase will drive even more jobs away from a struggling economy and not solve the county’s dire debt problems.

“Cook County needs a commitment by the board to implement long-term cost-saving reforms that slow the increasing burden on future residents, not higher taxes on alcohol and other products.”

John Nothdurft
Director of Government Relations
The Heartland Institute

“Government usually finds taxing ‘sin’ an easy touch. In this case, Cook County will essentially be legislating both winners and losers. Since individual brands of alcohol are ‘price elastic,’ consumers will pay more to consume less while the additional tax funds will go to the county. In the end, both the alcohol consumers and the specific liquor producers will be the ultimate economic losers. Alcohol will cost consumers more and revenues for specific producers could actually decline due to lower demand.”

John W. Skorburg
Visiting Lecturer in Economics
University of Illinois at Chicago (UIC)

The Heartland Institute is a 27-year-old national nonprofit organization with offices in Chicago, Illinois; Washington, DC; Austin, Texas; Tallahassee, Florida; and Columbus, Ohio. Its mission is to discover, develop, and promote free-market solutions to social and economic problems. For more information, visit its Web site or call 312/377-4000.