Economic analysis shows new alcohol tax proposal will cost hundreds of NJ jobs
WASHINGTON, D.C. – A proposal to raise taxes on distilled spirits, beer and wine will cost New Jersey more than $50 million in lost business and approximately 850 hospitality jobs, according to an economic study by the Distilled Spirits Council (DISCUS) responding to a sweeping tax increase included in New Jersey Governor Jon Corzine’s proposed budget. Corzine’s proposed budget would increase the excise taxes on distilled spirits, wine and beer in addition to increasing the sales tax on those products by one percent. Under the proposal, the spirits excise tax would increase to $4.50/gallon, despite the fact that New Jersey’s current excise tax rate ($4.40/gallon) is already 10 percent higher than the national average. “A tax on alcohol is really a tax on New Jersey’s hard-pressed hospitality industry,” said Distilled Spirits Council President Peter Cressy. “If this misguided tax proposal is enacted, it’s the hospitality industry workers who will bear the brunt – waitresses, busboys and bartenders.” DISCUS’ economic analysis shows that the proposed excise and sales tax increases will cause consumers to simply spend less or purchase their products at a lower price across state lines. Between lost in-state purchases and reduced cross-border sales of spirits products, DISCUS estimates New Jersey would lose an estimated $50 million in business and approximately 850 jobs. “It makes little sense to spend tax dollars to promote New Jersey’s tourism and hospitality industry, and then impair that industry with higher beverage alcohol tax rates,” said Cressy, noting that in 2004 over 16 percent of all new jobs in New Jersey were in the hospitality industry.