When the McDonnell Administration revealed its plan to get the government out of the liquor business, I had my concerns – and I wasn’t exactly quiet about them.
After some further review, I decided the problems with the plan were smaller than I thought, but they hadn’t disappeared. In particular, there were two new taxes that I felt were unwarranted – the 2.5% “optional convenience fee” and the 1% wholesale receipts tax (euphemistically dubbed a “license charge”). I called them tax increases, several bloggers expressed disagreement (Mason Conservative, Brain Schoeneman, VA Blogger – albeit in various comments, rather than posts - and Jim Hoeft among them).
Well, I could say the Governor himself agreed with me, but rather than kick that hornet’s nest again, I’ll just say he rendered the symantic discussion moot, because the taxes are gone (Richmond Times-Dispatch):
The revised plan, endorsed today by a gubernatorial subcommittee on government reform, would eliminate the proposed 2.5 percent optional tax on restaurant alcohol sales and a 1 percent tax on wholesale liquor sales.
Folks, this changes everything. Simply put, the McDonnell ABC privatization plan no longer includes tax increases.
Clearly, the Administration decided the $26.5 million that would have come from these taxes wasn’t really worth it after all. Good for them. I would also note that I do not agree with the Wine and Beer Wholesalers’ Associations on the nature of the new excise tax (here’s why).
There were many of us who were concerned that McDonnell hadn’t learned the lesson of the Summer 2008 special session (namely, that Republicans and tax hikes don’t mix). Thankfully, we can put those fears to rest now.