New Beer Tax Is Bitter for Brewers (by about 2000%)

[The Straight Story]

New Beer Tax Is Bitter for Brewers

Posted on Monday, February 16, 2009 (PST)

A Bill in the Oregon House proposes to raise the state Beer Tax by about 2000% House Bill 24-61 would raise the tax of a barrel of beer produced by state breweries from the current $2.50 to $52.00. Deschutes Brewery President Gary Fish says the Bill is nothing less than punitive and egregious. If passed, the price of a keg would increase by more than $40.00 and a six-pack would go up about $2.00.

http://www.kbnd.com/319117.aspx

More here:

http://www.oregoncommentator.com/2009/02/16/oregon-legislature-wants-to-increase-beer-tax-by-1600/

[barbtries]

1. how are they

justifying such a huge increase?

[Hannah Bell]

2. same way they justify the hikes in cigarette tax.

[sandnsea]

8. From a penny a bottle to a dime

To pay for alcohol related court costs, evaluations, treatment, etc.

[kiva]

21. But is that where it will go?

Notice that the majority of taxes on cigarettes do not go for health care for smokers, or for stop-smoking treatments; instead the various state governments consider this revenue to be some sort of petty cash fund to use as they choose. Funding SCHIP by using an increased federal tax on tobacco is just the latest way for the government to tax a minority with the support of the majority. I suspect that the same will happen to this tax, and the money will be used to fill funding gaps left by voters who shirk their own tax responsibilities and prefer that "sin taxes" fill the void.

[sandnsea]

26. That's not true

Cigarette taxes do go for health care, federal and state.

The cigarette law suit money a few years ago went for all kinds of who knows what silliness.

At the state level, yes, taxes collected do go where they're targeted as long as the law is written that way.

The question really is, when the money gets to the treatment facility, does it go to $100,000 salaries and benefits - or does the addict actually get help.

[kiva]

29. Not necessarily.

The state already takes in over $711 million in cigarette excise tax and the tobacco settlement yearly.

The tobacco settlement money is being used to fund the state retirement system.

Senate Bill 2454 Lung Cancer Early Detection and Research Funding Bill is being defeated today by the Senate Ways and Means Committee, as there is no money for this bill.

Only $4 million of the $711 million is used for stop smoking programs.

http://www.patriotledger.com/opinions/letters_to_the_ed...

or

The New York Times on Sunday examined how a "growing reliance by the states and federal government on cigarette taxes -- as well as a popular proposal to increase federal taxes by 61 cents to an even $1 per pack to finance -- provide a sort of insurance policy for the continued survival of menthol cigarettes." The National Conference of State Legislators last month said states were facing combined deficits of more than $40 billion in 2009, and increasing tobacco taxes "is one way some states are trying to make up the shortfall," the Times reports. Last year, states collected more than $19 billion in cigarette taxes. Ten states increased their cigarette taxes in 2007 and more states are considering increases this year. According to the Times, the government "has become a financial stakeholder in smoking, some would argue, even as public health officials warn people about its deadly consequences" (Saul, New York Times, 8/31).

http://www.medicalnewstoday.com/articles/120076.php

or

Public schools struggling with recent budget cuts could get relief from legislation expected to be considered today at the state Capitol, but the measure relies on a financing method that is far from gaining final approval.

House Bill 1383 would use $68 million generated from a proposed tobacco tax hike to restore money cut from the Mississippi Adequate Education Program, the funding formula for elementary and secondary schools.

http://www.clarionledger.com/apps/pbcs.dll/article?AID=...

or

The Arkansas Senate approved raising cigarette taxes by 56 cents a pack Thursday and increasing other tobacco taxes to pay for a statewide trauma system and a host of expanded health programs.

The bill now heads to Gov. Mike Beebe, who proposed the $87.8 million tax increase as a way for to pay for health improvements throughout the state.

http://www.forbes.com/feeds/ap/2009/02/12/ap6046247.htm...

If tobacco taxes were used to pay for health and education directly related to tobacco issues, frankly no one could complain about how much smokers cost because we would be more than paying our way. Instead, these taxes are used as a bonanza by state and federal officials.

The programs listed above are all, including the new taxes for SCHIP, services that need funding. That said, if state and local legislators see these items as essential, why aren't they using a more reliable source of revenue to fund them? Sin taxes are a poor bet, since (as at least one person on this thread has mentioned) people can choose to quit smoking, or drinking, or whatever is currently being taxed. Then tax revenue falls, the programs lose funding, and lawmakers either have to raise the tax or cut the program. The same thing will likely happen with this beer tax--a handful of sanctimonious types will reassure themselves that this is for our (drinkers/smokers/whatever) good, and then wonder why these wonderful programs are cut when we sinners repent.

[sandnsea]

30. yes, tobacco settlement money

That's what I said. That money went to all sorts of things.

A tax, on the other hand, must go where the law says it must go. Federal tobacco taxes that are passed to fund SCHIP, must fund SCHIP or a health care plan that the state has received a waiver on.

Attacking cigarettes as a funding source is a lame excuse by the right to prevent any kind of health care assistance.

Yes, we need a system for everybody, but I do think when we get one it will eventually rely on new taxes as I just laid out. Not sin taxes, a big fun and free health care tax.

[kiva]

32. Oops, the first reference is to the tobacco settlement money.

My state, Nevada, spent it to fund college scholarships--a good cause, but something that should be funded in other ways.

The other 3 references are all to raises in tobacco taxes to fund specific programs that have nothing to do with funding anti-smoking programs or tobacco related health problems.

I agree with you that what we need is a universal health care system funded by a consistent revenue source, and dammit we won the mandate for change in the last election--why aren't we telling the Republicans to go pound sand and just do it?

[sandnsea]

34. They're funding what they say they're funding

The federal law will fund SCHIP because it has to. State laws will fund what they pass legislatively, most will fund health care. Maybe MS is using cigarette funds for their addiction prevention programs, tough to say. The taxes have usually been connected to health care in some way though.

[DJ13]

3. Beer drinkers & cigarrette smokers need to start protesting

[LanternWaste]

15. I'm protesting by quitting...

I'm protesting by giving up my pack a day habit.

Nothing good in smoking, and only good can from from quitting-- win-win for me.

[lame54]

28. I do...

but the bartenders are getting tired of my complaining

[Hoopla Phil]

4. That's nuts!

[Lost in CT]

5. Well I am in favor of a reasonable increase of sin taxes. And $2 a six pack seems pretty reasonable.

[GentryDixon]

6. Sin Tax.

They need to increase taxes on the cola drinkers. That would bring in a huge amount of funds.

[crikkett]

9. Esp. considering the horrible health problems brought on by excessive

soda consumption.

[GentryDixon]

10. I had a talk with my son about that.

He was allowing his son too many soda's, in my estimation. The high fructose corn syrup scares the hell out of me. He actually sat his son down this weekend and explained why he was being cut back on his soda consumption.

Whew. :bounce:

[Occam Bandage]

14. I'd be in favor. nt

[SmileyRose]

18. the corn lobby will never allow it.

I'd LOVE to see products containing high fructose corn syrup taxed so high everyone is forced to switch back to sugar. Won't happen though.

[phantom power]

7. I'll tell you why this is happening.

It's happening because legislators are desperate for revenue streams. And the GOP obstructs any sensible revenue stream, like progressive income tax increases.

So they thrash around with half-assed solutions like this.

[bighart]

16. I would say that is a stretch given

that both house of the legislature in Oregon are controlled by a democrat majority, 60% in both houses in fact.

[phantom power]

20. If it's anything like federal Congress, I'd say it's not much of a stretch.

We have Dem majority in both houses of federal congress, and yet the stimulus bill includes a bunch of useless tax cuts, after 8 years of bankrupting the govt with endless tax cuts.

[Fleshdancer]

11. So only beer produced in Oregon would see a tax increase?

I thought sin taxes were traditionally placed on the consumer, not the producer. The way this is written, it sounds like Oregon beer producers would be hit which would mean the price of their product would go up but not the price of beer produced outside of the state. Am I reading this wrong?

[BR_Parkway]

22. That's a sure fire way to kill off a little more of the Oregon economy -

put all the out of state brewers at a competitive advantage. Geeze, for such a cool state, they sure elect some dumbasses to run it.

[Double T]

12. Looks like Prohibition is right around the corner in Oregon.

Oregonians need to elect NEW legislators to replace the idiots they elected.

[Occam Bandage]

13. I like sin taxes. nt

[SmileyRose]

17. Why would a keg go up $40? It should go up $24.75 because of the tax.

2 kegs in one barrel right? $52 - 2.50 = $49.50 in additional taxes. Split between 2 kegs is an additional $24.75 per keg because of the tax.

There are about 56 Sixpacks in one barrel of beer according to WikiAnswers. $49.50 in additional taxes divided by 56 sixpacks is 88 cents per sixpack. not the $2 claimed by brewers.



All that said, if the state needs more money they should just change the general tax percentage. This idiot habit we have of special taxes for special important things is just silly IMHO. We tie school funding to something like a beer tax and when people give up on beer and take up coffee instead then the schools suffer until the legislature screws around with people's behavior again by taxing one thing and not another.

[sandnsea]

27. Tax it all

Cover all health care. Simple solution. I forgot coffee and tea, we could add that to the junk food, fast food, booze, cigs, prostitutes, gambling, and caffeine tax.

[ConcernedCanuk]

19. Well, the bootleggers are rubbing their hands together . . .

.
.
.

15 - 20 years ago our government boosted up cigarette tax

It was a bootlegger's windfall

gov't lowered the taxes

bootleg cigarettes almost disappeared

SO

The government raised the taxes again

Store bought cartons are over 50 bucks up here

Bootleg cartons - $15 -$20

Guess who's getting lots of business??

doh . . .

[1]

23. i don't drink beer. so, i agree with this tax...

gee, i feel just like a non-smoker.

weee... :smoke:

[riverdeep]

24. Maybe they should start taxing McDonalds heavily.

How much does being overweight cost? Diabetes, high blood pressure, heart disease, strokes, all these are increased with obesity.

Or should we just say, the hell with it. You're adults and it's your body. Let the insurance industry, and the like, settle it. Let them do a test to check for cigarette smoking and liver damage through alcohol and obesity, and they can set your rates. The worse shape you're in, the higher your rates.

[TheMadHatter]

25. That would be the fair thing to do

You mess up your body, you pay for it. I live in Oregon and enjoy microbrews and I'm pissed that this would most likely push Widmer, Rogue, etc, over $10 per 6pack.

This is yet another drop in an endless stream of money grabs.

[Libertyfirst]

31. Stop all the penny ante taxes. Legislators need the balls to enact

a very progressive state income tax and be done with it. They are not going to balance budgets with this kind of foolishness.

[ozu]

33. So ummm...

This is only going to work to push Oregon microbreweries out of state rather than have to face a forced competitive disadvantage of $2 per pack.

Well thought out plan, legislators.