Oregon Governor Proposes Stealth Tax Via Liquor Markup

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After claiming that she wouldn’t raise taxes on alcohol, Oregon Gov. Kate Brown’s budget proposal includes a call for a 5% increase in the markup for liquor. As reported by Oregon Public Broadcasting:

As she finalized her budget proposal for the next two years, Oregon Gov. Kate Brown made no secret of the fact she’d push for higher tobacco taxes, which she believes should play a larger role in funding health care.

At the same time, Brown said she wouldn’t pursue higher taxes on beer and wine, despite a request by the Oregon Health Authority…

But there was one “sin tax” that Brown didn’t mention — to the media or the industry that would be affected. Brown wants to increase what the state collects from liquor sales.

Tucked toward the back of Brown’s 500-page, $26.3 billion budget proposal released Wednesday is a single mention that the governor hopes to raise the markup on Oregon liquor sales by 5 percent beginning July 2019. The move would bring an extra $21.2 million into the state’s general fund, according to the budget proposal…

Read more here.

Oregon is one of 13 states that controls distilled spirits sales at the retail level—liquor stores are operated by state-appointed liquor agents, but the state sets the prices. As R Street’s Jarrett Dieterle has noted before, control states that increase liquor markups are really instituting a form of stealth tax on their citizens—especially when the money generated from the enhanced markup merely flows to the state’s general fund. (Read Jarrett’s report on control state markups here.)