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October 9, 2008

Report: Beverage tax a financial burden

By The Mainebiz News Staff

A proposed tax on beer, wine and soda to help fund the state's Dirigo Health program will pose a financial burden to Mainers, according to a study by the University of Maine.

The study, done by UMaine Associate Economics Professor Todd Gabe, and paid for by a group opposing the tax, says the tax would force Mainers to curb their beverage purchases, which would result in a loss of $26 million a year in sales revenues and nearly 400 full- and part-time jobs, according to the Bangor Daily News. The study also says that Mainers would pay $40 million in additional taxes on beverages a year.

But supporters of the beverage tax say the study overestimates the amounts of soda and other drinks consumed by Mainers. Fed Up With Taxes, the coalition fighting against the tax, paid $21,700 to help fund the UMaine study, according to the paper.

If approved by voters on Nov. 4, the tax would replace Dirigo's controversial Savings Offset Payment as a funding source for Dirigo-Choice, which serves 18,000 people and small businesses in the state. The Legislature's Insurance and Financial Services Committee says the new tax would raise about $17 million in the 2009 fiscal year.

 

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