15 May 2009 @ 8:56 AM 
 

Taxation without consideration: Stop a raise in beer tax

 

For the past few days, I’ve been planning on writing a piece about the hearing before the Senate Finance Committee earlier this week. The hearing was in regards to financing comprehensive health care reform. However, I couldn’t do any justice to the topic beyond the writeup at the Brookston Beer Bulletin as well as his subsequent call for action.

In case you haven’t been following this end of the news much, it was recommended by 3 of the panel of 13 “witnesses” that a significant increase in taxes on cigarettes and beer would be the best way to pay for Obama’s proposted health care reform. Holy moly. Like beer needs any more taxation. I’ll sum up the expert opinions here, but you should go read the Brookston articles to have them broken down. They’re fantastic.

The expert opinions sum up to:

Alcohol is bad for you. If you tax it heavily, not only do you recoup costs but you also create a prohibitive barrier to over-consumption.

The interesting thing there to me is that there are known health benefits to moderate alcohol consumption. On the other hand, there are no benefits to consumption of high fructose corn syrup, unless, I guess, you really love being fat. In fact, it is considered to be one of the leading causes of the obesity epidemic in the U.S. because it’s in freakin’ EVERYTHING. Walk down the grocery aisle sometime and see how many foods you can find that don’t have high fructose corn syrup in them – especially foods marketed to kids. It’s pretty damn educational.

As far as I’m concerned, if you really want to recoup costs and put a prohibitive barrier on over-consumption that will affect a positive health change in our society, increase the taxes on everything that includes a sweetener and increase taxes on fast food (which is also really high in high fructose corn syrup!). Is it still a tax on the lower class? Unfortunately, but if part of your taxation plan is actually creating a prohibitive barrier to one of the roots of the problem, it’s the way to go.

Beer is a luxury and is already one of the most taxed and regulated products in the country. Raise the taxes on it, and I think you see less income, not more, since you will essentially be on your way to shutting down hundreds, if not thousands, of small businesses and putting tens of thousands of people out of work.

I’ll point you again at BBB’s call for action. Contact your representative, especially if you’re in the beer industry, but also if you just like beer. Let them know that this is the wrong target.

Tags Tags: , , ,
Categories: industry, news, taxation
Posted By: erik
Last Edit: 15 May 2009 @ 08 56 AM

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Responses to this post » (6 Total)

 
  1. Russ Carr says:

    I thought most fast food burgers were nothing BUT gelatinized high fructose corn syrup, mixed with beef tallow for flavor.

    On top of that, if not beer-related: Consider the savings to health, energy costs and the environment in doing away with drive-thrus. Drive-thrus have allowed Americans to sit in their idling cars, burning fuel and releasing exhaust gases, while they wait for already-packaged food to be put into…other packages. Prior to drive-thrus, people actually had to park their cars, get out and WALK into the restaurant. The exercise may have been minimal, but it was an alternative to complete sloth, and at least all that gas wasn’t (literally) going up in smoke.

    I have no problem with taxing smokes; there’s no health benefit to tobacco products. I lump HFCS in the same category, which by extension places the processed food industry right up there next to Big Tobacco. But it’s further proof that, as with the best beer, the best food is the stuff with real, natural ingredients, made in a kitchen, not a lab.

  2. […] at Top Fermented, there’s a great argument against raising beer taxes. We’ll give you the gist below, but be sure to click through for […]

  3. Russ Carr says:

    From a story posted this morning on CNN.com:

    Some possible tax changes would be designed to nudge consumers away from products deemed likely to boost health costs, including alcohol and sugary sodas. The committee is considering a uniform excise tax of $16 per proof gallon for beer, wine and other alcoholic beverages.

    Another option would be to place a federal tax on drinks sweetened with sugar or high-fructose corn syrup.

    Both ideas met swift opposition from industry groups. Jeff Becker, president of the Beer Institute in Washington, said the suggestion of a “substantial increase” in alcohol taxes threatens jobs in an industry that already paid $41 billion in taxes in 2008.

    If passed, the increase in the alcohol excise tax would be the first since 1991, according to Mark Gorman, a lobbyist for the Distilled Spirits Council of the United States, based in Washington.

    “That would be a big hit to the hospitality industry which makes an awful lot of its profits from the sales of beverage alcohol,” Gorman said. “We’re already the highest taxed consumer product in the country other than tobacco. It’s going to be a hard hit to take.”

    ‘No Logic’

    A spokesman for the Washington, D.C.-based American Beverage Association said it’s unlikely there would be enough public support for an additional tax on soft drinks. Kevin Keane, a spokesman for the association, said the public would “see no logic in singling out one product to pay for health care when nearly all foods and beverages have calories. They just see it as a money grab.”

    The association represents Coca-Cola Co., PepsiCo Inc. and Dr Pepper Snapple Group, the three largest U.S. soda makers.

    Emboldening is mine.

    First, Mr. Keane’s statement is hyperbolic; no one is suggesting such a tax would “pay for health care”, it would merely be one of a number of sources of revenue. Second, isn’t a substantial portion of the Big 3 Soda Cos product line given over to zero-calorie products? Third, and finally, as Erik pointed out in his blog post, there are actually benefits to be found in moderate, responsible consumption of alcoholic beverages. There are, to the best of my knowledge, NO health benefits associated with soda consumption. I believe it was 7-Up attempted a vitamin-fortified soda a couple of years ago, “7-Up Plus”; to the best of my knowledge, it was a flop, and is no longer available.

    Bottom line: soda is nothing but chemicals and empty calories, and contributes about as much to our health as cigarettes. I love me an icy cold Coke in the summer… and it’s especially good with a splash of vanilla vodka… but I wouldn’t cry too hard if the price jumped. It’s added motivation to cut back on my consumption, and shed some carbonated calories.

  4. erik says:

    Thanks for posting that, Russ.

    In some way, it’s a little frightening to think of all this being in the hands of lobbyists.

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