Wednesday, June 3, 2009

Can I Get Some Tea Parties Over This?

Woe is government. With the economy on the brink of ruin, government revenue streams have been going all dodo on us. Some legislators have come up with a brilliant solution: raise beer taxes!

In Oregon, one of America's craft-beer breadbaskets, cash-hungry politicians are pushing to raise the state's excise taxes on beer by ... wait for it ... 1,900 percent!

Well, Lew Bryson is having none of this foolishness. Over at his fine blog Seen Through a Glass, Lew lays the smackdown on the notion of beer taxes, and excise taxes in general, in a fiery post designed to get the rest of beer-loving America to stand up for our suds.

It worked on me. I shot off a letter to my national and state representatives voicing my opposition to hiking beer taxes, with Lew's missive providing valuable inspiration. We should all do the same – makes it mighty easy.

Update: Before I get to the letter, here are three fine beer-tax-related posts from Brookston Beer Bulletin. They're all particularly germane to this discussion.
Typically great stuff from Jay at BBB. OK, Here's my letter:

Dear [Insert Pol's Name Here],

As governments across the U.S. grapple with dwindling revenue sources and ballooning deficits, many leaders have proposed raising excise taxes on particular goods -- specifically, beer. This "solution" has me deeply troubled.

To begin with, raising taxes during a recession strikes me as seriously flawed policy. You are, in essence, taking more money from people who have less of it, and at the same time placing an extra penalty upon consumer activity -- something that, as we know, is a critical engine of our economic health.

In addition, the notion of taxing certain goods to pay for programs and government services that ostensibly benefit all of us is inherently unfair. If we are all to benefit, then let us all shoulder our reasonable share of the burden. I believe in progressive taxation, not in arbitrarily handing a chunk of the bill to people who happen to buy one kind of good over another.

And in beer, once again we have found an easy and supposedly uncontroversial target for extra taxation, on the grounds that higher taxes may discourage use of the product, which would be a good thing anyhow. This is the thinking behind so-called "sin" taxes.

This approach fails to hold up to critical examination. If the objective of raising excise "sin" taxes is simultaneously to bring in additional revenue while also discouraging access to an unhealthy or immoral good, then these are incompatible goals. If a tax is sufficiently high to curb demand, then revenues will fall -- unless, of course, the tax is so astronomical as to make up the difference. In this case we would be dealing with a monstrously high tax of outrageous proportions. Better to just muster the courage to ban the offending good altogether rather than hide behind taxes.

A final word on increasing beer taxes: As a consumer of high-end, specialty beers, I, along with like-minded consumers, already pay significantly more for the same quality of beer than do mainstream beer drinkers. The unique craft brews and imports we enjoy already cost around two times (or higher) more than typical American industrial beers. Raising excise taxes on all beers will price many of these special beers out of consumers' price range -- hurting not only consumers but a number of American small businesses in the process.

Meanwhile, it cannot be overstated that the high-end beers that can least afford price hikes are already of no interest to "problem drinkers" whose consumption is the target of such "sin" taxes in the first place. The beers enjoyed by connoisseurs, by virtue of their price and richness in flavor, are highly unlikely candidates for abuse. It is the mass-market, inexpensive mainstream beers that fall into this category; already they are inexpensive and accessible enough to be far less affected than high-quality artisanal beers.

I must emphasize that I oppose, on grounds of principle, any increase whatsoever in such excise taxes, even an incremental one. Again, if we are all to benefit, then let us all pay our fair share. Tax schemes that work otherwise are not only unfair but, to be honest, the mark of political cowardice.

I hope I can count on you to stand in firm opposition to any increase in beer excise taxes. I will give my support to any officials who fight against unfair tax increases that disproportionately target an arbitrary category of law-abiding citizens. I will not hesitate to withhold my support from those who do not.

Thank you very much for your attention on this important matter.


michael Reinhardt said...

I seem to remember something about taxation without representation. I don't know where I read that. Where is the representation. Unfortunately, we would be dumping out beer. We could get more people home brewing, but they would increase the cost of supplies. We really do need someone to fight this fight against "sin" taxing.

nate said...

I did my do-diligence and emailed my senators. While I am all for brotherly love and help the poor and widowed, I don't think it is the task of the government to demand it of me.

I suggested in my email, to start taxing bigmac meals and pork rinds since more Americans are afflicted with obesity and dies of heart disease than alcoholism. Plus the revenue would be greater.

Brad said...

Nate, I've heard the idea of taxing sugary soft drinks (and perhaps other junk food; I can't recall the details) as one method of coming up with funds for healthcare programs. At least that makes more sense to me than taxing alcohol, given the science that actually links moderate alcohol consumption to improved health. Lew Bryson pointed to a World Health Organization study that suggested the costs vs. benefits of alcohol consumption are basically a wash. Now, you don't hear too many tax-happy, anti-beer types trumpeting those kinds of data.

Michael, I wonder how big home brewing would have to get before the taxman starts licking his lips. Sometimes I'm happy to fly under the radar.

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