Illinois Gov. J.B. Pritzker has proposed a new controversial plan that would raise taxes on Alcohol. According to his proposal, the taxes on beer, wine and liquor in Illinois would rise and the money collected will be used to fund state infrastructure. This is just a part of his plan in which an estimated $120 million from a tax increase on booze by the gallon.
If this plan is passed, then the distilled liquor tax per gallon will be $12.60. The tax at the moment is $8.55 per gallon tax. This would make the ninth-highest tax rate for spirits in the U.S. The tax for wine would increase to $2.05 which would be the third-highest in the country. The tax rate for beer will increase by 28 cents.
Pritzker was talking to media on Wednesday and said that he is confident that the people of Illinois will swallow $1.8 billion in new taxes. The reason for his confidence is that this money will be used for a massive state construction program. He will face opposition as some Republicans believe that the tax hikes are unnecessary and that the money could be generated from expanding casino gambling to help finance the program.
Pritzker said that there is need for his six-year $41.5 billion plan. This plan includes building and repairing road, bridges, schools, parks, etc. The proposal includes doubling gas taxes and vehicle registration fees. He also proposed to tax video entertainment services and ride-sharing. He believes that the people will understand the tax hikes.
The Illinois Retail Merchants Association has revealed that the beer industry alone generates about $14 billion annually. If the proposal is approved, then the small breweries would have to pass the cost to the drinkers to accommodate the tax hikes.