It started as a vague thought about why was it liquor stores were considered to be essential services during a nation wide lockdown, when beauty salons and barber shops were not.
What purpose does booze serve in this situation of faux quarantine other than as a coping mechanism for people stuck in their houses for weeks on end? There are some health benefits from moderate consumption, but in a culture where alcohol has a negative stigma from some quarters as “just a drug”, and has not been a part of the overall culture other than as a nice, but not necessary consumable, for over a century, why would beer, wine and spirits sales be deemed essential?
And then it hit me.
TAXES. Federal taxes, state taxes, local taxes, import taxes, and on and on.
Alcohol carries a higher tax rate at all levels than just about any product on the market other than firearms which I found out are taxed along with ammunition at 10% to the federal government. (source) Plain and simply, with America not working, and income tax receipts going to be down in the next year, the federal government needs the money…and if there is anything that Americans can be depended on to purchase, it’s liquor and guns.
What is considered essential to remain open then, other than civil services of police, fire and trash pick-up; medical services and then only emergency and maintenance service; burial services; banking services; grocery and discount stores; carry out for those who don’t cook; and construction, is what products and consumables generate revenue for the federal government and will keep people working from home (source). To wit:
Liquor stores, including state-owned ABC liquor stores
Edit/update: I was reminded by commentors that marijuana shops and abortion clinics should be added to this list, although the tax advantage is not necessarily in play.
Follow the money….
II. Federal Excise Alcohol Taxes
The U.S. government collects these alcohol taxes per gallon.
Wine…….$1.07 to $3.40 depending on alcohol content.
The federal government collects about one billion dollars per month from excise alcohol taxes on spirits, beer, and wine. The taxes on spirits are much higher than those on beer or wine. Therefore, well over half of that tax money comes from spirits consumers.
And that doesn’t include the import taxes of any and/or all of the above that comes from other parts of the world, or what is added on by the state, counties, and various municipalities, which can be up to double the money and in a number of states must be purchased from a state monopoly store (source). And, on top of it, all dealers have to have a license, which also generates revenue for government at all levels.
In other words, the tax receipts on these products, straight up, from the perspective of the people in charge of taxing us, can’t be shelved during lockdown.
That does not explain, though, why all the retailers other than Walmart, Target and other big box stores are left open when other businesses selling products rather than offering services are left to languish. To wit:
- furniture and home furnishing stores
- clothing, shoes, and clothing accessory stores
- jewelry, luggage, and leather goods stores
- department stores
- sporting goods stores
- books, craft, and music stores
So many of these sorts of stores are owned by conglomerates that are publicly traded and do import business, it is puzzling other than for optics since sales at these places DO generate tax revenue at the local level.
But taxes are not collected on sales at the federal level, and certainly not at a rate of 10% or higher as is the case of firearms and ammunition.
So, what is NOT deemed essential right now? Any service or venue that DOES NOT generate revenue for the federal government.
auditoriums and performing arts centers
tourist attractions including museums and planetariums
indoor children’s play areas
adult entertainment venues
venues operated by social clubs
Athletic facilities and activities
fitness centers and commercial gyms
spas and public or commercial swimming pools
yoga, barre and spin facilities
sports that involve interaction with another person of closer than six feet
activities that require the use of shared sporting apparatus and equipment
activities on commercial or public playground equipment
Close contact service providers:
nail salons and spas
body art facilities and tattoo services
massage therapy establishments and massage services
Entertainment venues can be argued to be soft targets which need to be minimized as the military goes about keeping us safe, but, still, the admission price is not taxed at a federal level. Some local taxes may apply, but that is not a given.
Services, OTOH, are rarely taxed. Any taxes paid are for product in relation to the service. At least, in the state where I reside, that’s the case.
So, there you have it. Why are liquor stores deemed essential when hairdressing and barbers are not?
Follow the money.