Raising taxes on beer is bad for the economy

4 mins read

Two dozen states are currently considering proposals to increase taxes on beer and alcohol. Two states have been making the news recently for their outrageous proposed increases: Oregon, with a 1900% increase, and Idaho, where lawmakers want to triple the current taxes imposed on beer and wine.

There is good reason for alcohol, and particularly beer, to be targeted for increased taxes during a recession. When people are facing tough economic times, they still indulge in libations, especially beer, which is seen as a more economical alternative to wine and spirits.

Lawmakers see their shrinking revenues and desperately start looking for some way to meet their budgets. Often, such seemingly noble causes as substance abuse programs are used as a transparent excuse for increasing taxes. Others have torn apart this shill more eloquently than I can so I’ll let you read what they have to say.

Beer is already taxed more than most consumer goods, 68.6% more according to the Beer Institute. As Charlie Papazian put it, “Why put a disproportional burden on 80 million responsible beer drinkers?? It seems that beer drinkers and brewers are already paying more than their fair share and that the ?needed funding? is not being appropriately proportioned from already taxed beer dollars.”

What lawmakers seemingly fail to realize is beer’s impact on the economy. By some estimates, increasing the price of a case by $1, actually costs the consumer $2.70 once you figure in other factors. This is tough to swallow when you are already having a hard time making ends meet. So, you buy less beer (which is why Neo-prohibitionists are often behind these tax increases).

A drop in beer sales means a drop in purchase of agricultural products such as malt and hops; loss of jobs.? Fewer bottles and cans, packaging materials, equipment purchases; loss of jobs.? Less beer distributed, fewer deliveries, loss of jobs.? Less beer sold at retail; loss of jobs.? Less of everything: less payroll taxes, sales tax, use tax, inventory taxes, corporate profit taxes.? More unemployment.

The beer industry makes a big contribution to local and state economies and has the potential of weathering the recession better than many industries. So why would any rational politician want to mess with that?

To be fair, there are lawmakers who get it. Instead of increasing taxes and hurting beer sales, some states are trying to relax laws on beer and alcohol sales. This will result in more sales and increased revenues across the board.

If you live in a state that is considering raising taxes on your beer, contact your state sentors and representatives and tell them (nicely) what a mistake they are making. If you live in a state that is working to relax so-called blue laws and other impediments to legal consumption, contact your state sentors and representatives and let them know how much you appreciate their efforts. They work for you so let them know how you feel.

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