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Liquor stores around the Square yesterday reported large buying sprees in an attempt to beat the federal tax hike effective tomorrow. Cronin's and Wursthaus bars disclosed a five-cent price rise on most drinks as a result of the new levy.
The price change comes from the Revenue Act of 1951 passed by Congress two weeks ago. The bill places a general tax on liquor of $1.50 per proof gallon, or about 33 cents a bottle.
Cigarettes will also go up one cent a pack. But dealers announced no big buyer stock-ups, because tobacco dries out too quickly.
Since today is the last day for old prices, most liquor stores plan to stay open a little later than usual tonight. Massachusetts law, however, forces them to close by 11 p.m.
Manager of the Harvard Provision Store, James Mahoney, declared that he would probably be up all night after closing time taking inventory and changing price tags. Other proprietors agreed that the new tax will make much extra work, and complained it was an unfair burden on liquor dealers. A Varsity Liquor Store salesman explained that a certain whiskey that costs $3.79 a fifth will have a tax of $2.88.
"We've absorbed enough of these taxes," Wursthaus owner Frank Cardullo said. He pointed to the last 50 percent federal floor stock tax rise in 1944. But business should not slack off too much, according to Cardullo.
Commenting on the economic aspects of the liquor tax rise, J. Keith Butters, associate professor of Business Administration, predicted it would "have an overall deflationary effect and change sales very little." Liquor and cigarettes have the highest excise tax burden of any commodities on them, he said. One reason, Butters stated, for Congress placing greater taxes on them in time of greater revenue need is the moral stigma attached to their use.
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