Local issue today, friends. I think this can probably apply to most places if it has to, but my focus today is the great state of North Carolina.
Dear North Carolina Legislators and Gov. Bev Perdue,
Please stop. There’s been a lot of talk about how to fix the state budget. In fact, we’re a week overdue on a budget, anyway, so this seems like a pressing issue. People keep talking about what to tax to fix this budget shortfall. I’d prefer that the answer be “not beer.” I think I’d also like to say, “Don’t furlough me again.” but really? This is about beer.
I know. Sin Taxes are popular and easy: Tax the things that Portion A of the population fervently believes is bad for Portion B of the population. In doing so, not only will you make money on people who are not Portion A, but it will act as a deterrent for Portion B to buy those evil products. Portion A loves it, and they’re very vocal and often have money, which kind of makes me wonder why we aren’t taxing them.
Just a couple of things:
1) If you’re only taxing a portion of the population, it’s not a very effective tax in terms of income.
2) If you’re using tax as a deterrent on consumption, you’re not planning on making any money in the long run, as the less people buy the evil products, the less money you will make.
Sin Tax seems silly. I’d much rather see a Fat Tax. We know that our health care system is in financial crisis. We know that there’s an obesity epidemic. We know that obesity is a predictor in heart disease, arthritis, diabetes, and early mortality across the board. We know what makes people fat (sugar and (amazingly) fat), so tax that if you want a tax deterrent. I’ve mentioned before that I think that a tax on products containing High Fructose Corn Syrup would be much smarter than a tax on beer, and I still do. But I’m not here to argue that.
No, I’m going to assume, that despite the wonderful efforts of the good people behind Stop the NC Beer Tax (dot com) that you’re going to throw your better judgment to the wind and raise taxes on beer and wine. So instead, I’m going to tell you how to do it.
Consider for a moment that a city in your fair state was recently voted co-Beer City, USA in a poll run by President of the Brewers Association. Consider that, as of this summer, there are ~40 craft breweries either in operation or in the middle of starting up. These are all small businesses contributing to your local economy. They’re creating jobs in communities across the state. Consider that a rise in beer tax will hurt these small businesses – especially the startups – the most.
But hey.. you’re going to tax beer. Portion A must be satisfied. Please consider the following two-part plan:
1) Increase tax per barrel of beer manufactured inside the state of North Carolina by any brewery manufacturing over 15,000 barrels of beer annually (ie – Regional Breweries and larger). Leave the small business out of it.
2) Increase tax per case of any beer imported to the state of North Carolina by any brewery manufacturing over 15,000 barrels of beer annually. Leave your neighbors’ small business out of it, too.
Fact is this: Something like 99% of the beer consumed inside the state of North Carolina is manufactured by a regional brewery or larger – a significant portion of that beer is imported IN to the state of North Carolina. Those breweries are making money in states Other Than Yours – especially the macrobreweries – but most of the small breweries in the state aren’t. They’re distributing locally, often by-hand, in their own communities. They’re getting the tax pinch on every purchase of their product, not just the ones that happen in-state. So how are these small breweries going to deal with the fact that they have a significantly higher cost of operation and, if the Sin Tax works, poorer sales? Will they lay off workers? Will they close doors altogether? In Beer City, USA?
The way to turn the corner on this economic downturn begins and ends with the small business. Don’t hurt them more just because Sin Tax is easy. Help them, and reap the benefits. Maybe take yourself out for a good local beer to celebrate a good deed done for the day, and then ask yourself:
Why are we taxing beer in the first place? Sin Tax is cheap and misguided. There are a million better ways to save money and generate revenue that don’t actively hurt small businesses in our state while at the same time, allowing us all to continue to treat ourselves to a an occasional affordable luxury.
Erik L. Myers,
Self-Righteous Beer Evangelist
If you’re inside North Carolina, please take the time to go Stop the 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.