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This page contains a single entry from the blog posted on February 18, 2009 8:39 PM. The previous post in this blog was Jail Blazer 4 Ever. The next post in this blog is Here we go again. Many more can be found on the main index page or by looking through the archives.

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Wednesday, February 18, 2009

That Oregon beer tax increase

Is it going to be 2,008%, 1,900%, or a mere 1,808%? You do the math.

Comments (31)

Hey, if they want to raise the beer tax, just do it. Do not use these bogus excuses like it will stop teenage drinking because:
1) A teenager will pay more for beer than a legal adult just to get it.
2) Remember the tobacco settlement, uh, how much of that is going to tobacco smokers or prevention?

When it comes to money these politicians will lie forever just to get the money.

Hey, great idea, guys! Let's take one of our few homegrown, successful industries, and tax the hell out of it!

Fine, raise the tax. Just double or triple it, but don't shock the system by raising it 2,000%. How is that good for consumers or brewers here in the state?

Prices on beer have gone up significantly over the past couple of years, mostly because of hop and grain prices. Widmer is selling six-packs for $9.49 + dep (when not on sale)... you have to know the market is going to cool off already. Are we going to drive homegrown beer drinkers into buying some cheap swill trucked in from god-knows-where? Is this going to give our brewers any competitive edge nationally?

Here's an idea: Let's use some of this tax to promote our beer industry in other states. Or create farming incentives to increase hop production in Oregon. People would support a modest increase if it provided a direct benefit to one of our few successful industries.

If it wasn't for that pesky dormant commerce clause, I'd say to impose a "sustainability tax" on beer. Keep the base tax where it is; for every mile the brewery is located outside of the state, the tax is increased by that much. Brewery in Seattle? That's an increase of 176% (7.23/barrel). Brewed in Milwaukee? That's an increase of 2064% (56.26). Brewed in Germany? That'll be expensive.

If the stimulus package includes a "buy American" clause (against the advise of the economists I've been hearing talking about the need for global solutions to the global crisis), why not us.

Yep- let's take an industry that is local,successful and employs
lots of people and tax it into oblivion.
That'll solve everything.
How about our fearless leaders in Salem learning to live within
our budgets? Grrrrrr.

You get what you vote for.

"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it." - Ronald Reagan

I hope this will drive everyone to become a home brewer! A couple of my friends and I started a year ago and it is very rewarding and once we go to an all-grain, mash-based brew, the cost of a 22 ounce bottle will be around $1.80.

With the malt extract method, we are paying about $2.15 for a 22 ounce bottle of good beer. Another beautiful element of home brewing is that Oregon hops and grains are what we use, so we are supporting local folks.

Enjoy a home brew!

Might be time to start homebrewing again.

I'll be contacting my local representatives to protest this tax increase. I hope that other beer drinkers will do the same. If it passes get ready for the $12 six-pack.

Leonard is thinking of taxing home brewed beer. SOL.

I'm for this one. The root idea is a dime per serving. Given the burden on society created by over-consumption and the extent to which the industry is failing to carry that weight, it is high time this thing was raised. If a dime a bottle or glass is 2008%, then fine by me. That is just a measure of how long they have gone without a reckoning for the burden they create, and it should shame the industry, not the advocates of catching up.

A dime a bottle is a small fraction of what the industry spends to promote enthusiastic consumption, and that includes with kids. Also they spend big bucks lobbying the OLCC to ignore the impact on neighborhoods of barfing, pissing, fighting over-consumers.

The print media in this town are so over-dependent on this industry and the retail establishments that promote over-consumption, there is nothing but rah-rah-rah. The truth is that our community needs treatment capacity desperately. This is an industry that has gotten way too much of a free ride for way too long.

Dyspeptic, please break it down to show us how you are arriving at your "dime per serving" figure.

It should shame the industry? Are you joking? The beer industry in Oregon has nothing to be ashamed of. If we are going to raise taxes to pay for alcohlism treatment, let's tax the makers of fortified wine and cheap spirits.

Dyspeptic, I didn't want to wait, so I did my own calculations.

1 barrel of beer is 31 gallons.

128 oz per gallon, so 3968 oz per gallon.

3968 oz = 330.66 servings of beer (I'll call it 331).

$49.61 tax divided by 331 beers = 14.9 cents.

So the tax is approximately 15 cents per beer (or roughly 50% higher than you claim in your post.)

As a beer drinker and beer snob, I just can't get terribly worked up about a potential increase in the tax. Right now, I believe the beer tax works about to be about a penny a pint. Do you really believe that people will stop drinking local beer and go back to Bud or PBR or Rolling Rock just because the tax raises the price of craft beers. I sincerely doubt that the pubs and the microbreweries screaming bloody murder are going to lose any business over this. Perhaps jumping it to 15 cents a pint is a bit over the top, but to raise it an additional dime a pint hardly seems worth the fuss everyone is making. Sure, I know that the math ignores the middle men and all the others who get their hands on the product before it reaches the consumer, but suppose beer went up 50 cents a pint. Would you stop drinking craft beer? I wouldn't. Would I buy less. Sure, this would theoretically raise the price of a 6-pack by $2, but unless you're a heavy beer drinker I doubt your behavior will change. To me this is simply much ado about largely nothing.

mrfearless, I personally already cringe when I pay $8.99 per six-pack. that is my absolute upper-limit. No way would I pay $10.99. Don't forget that barley and hop prices are rising also, so add another 50 cents or so to that increase.

Also, do you think your local bar is only going to hike up the price of your pint by 15 cents? I doubt that your pint will go from $4 to $4.15. I think $4.50 is the MINIMUM you would see.

I think that a lot of beer drinkers would purchase less beer if the price of a six-pack went up by $2.00 or $2.50. Can your favorite craft brewery survive an additional drop in sales in this economy? I'd wager that some won't.

drivin' fool. If you read my message closely you would have seen that because of the middle men etc, I expect that the change would force the price of a pint to go up $.50 in the pubs.

I don't know where you shop, but I've never paid more than $7.99 for a 6-pack of local craft beer, and more often than not, the price is $6.99. Of course, I don't shop at New Seasons, or Whole Wallet, or Market of Choice. I find that I can do fine at Safeway, Wizers, my local Thriftway, or even Fred Meyer. Occasionally I can do the same at Zupans.

Of course, I'm also eclectic in my craft beer tastes. If one brand seems overpriced, I have several alternatives which are usually cheaper. It is rare to see all of the craft beers I drink be high priced at one time. At least one of them is always on sale.

So, do you think that a penny a pint is reasonable? Personally, I don't. I think it is way too low for a product that is discretionary.

Dsypeptic, very few business ever take a price hike and only directly increase their price to the next stage of the chain at what they are charged. The 15 cents tax hike for the maker has minimum three stages (wholesaler, distributor, retailer) that marks up the price. Your Oregon crafted beer will be costing at least $6 dollars for a 12 oz. glass. Enjoy.

The industry will accept some increase, but not even close to the proposed percentage. And like the tobacco taxes, tobacco insurance settlements, very little ever goes to addiction treatment. Not to discredit the supposed interest of the tax hike, but is the hike really about treatment?

Remember that tobacco tax settlement money of $250 Million went indirectly to SoWhat through OHSU. That is a good demonstration of how tax dollars have a way of filtering through in obtuse ways.

It's laughable to assume alcoholics are getting there with microbrews. All the one's I've ever known were into the cheap stuff... quantity over quality, and all that.

So why punish a craft industry with phony pleas for better treatment and education for a problem that is likely not their doing?

If we are going to raise taxes to pay for alcohlism treatment, let's tax the makers of fortified wine and cheap spirits.

How about we just tax the alcohol content of drinks?

The OLCC course teaches servers that a 5 oz glass of wine = a 12 oz beer = a 1 oz shot of 80 proof spirit when it comes to alcohol content.

Why not tax them equally?

Right now you pay a higher tax for a single shot of Patron (about $0.50/serving in the form of the OLCC retail mark up tax) than the tax paid on 50 beers (about $0.008/serving).

do the math.

I assume you meant "meth".

Hmmm . . . I'm not sure that I agree that it is unreasonable for taxes on discretionary products to be low. Many industry folk believe that the unusually low tax burden is what allowed the craft brewing industry to take off in Oregon. I don't think that is a bad thing.

Yes, it is an 1,808% increase, which is an increase of 18.08 times the original $2.60.

So the tax per beer goes from less than a penny, to about 15 cents. That seems more than reasonable when compared to the tax on hard liquor. This is probably just another case of tax law not being indexed to inflation, like the AMT.

For government Taxation is not a Privilege, it is a Right.

About effing time!
I will hoist a pint to this tax increase tonight.

Hard core street drinkers in my area drink mostly fortified malt liquors, except hard stuff when they can get it. The meth dealers pay them in hard liquor to do the riskier parts of their business, like hawking it to strangers on the street ("You OK?").

This tax has not been increased since 1977. Its value has declined with inflation.

------
Here's the proposal itself:

2009 Beer Tax: A package approach to Oregon’s Addiction Problem

Sponsored by Sen. Bill Morrisette, Sen. Jackie Dingfelder, and Rep. Ben Cannon

Tax: 15 cents per 12-ounce can/bottle on all beer sold in Oregon. Would raise approximately $320 million per biennium

How it would be spent:

* $196.42 million for treatment of alcohol and drug addiction

* $54.64 million for prevention programs for alcohol and drugs

* $22.54 for alcohol and drug recovery support services, and,

* $48 million for funding Ballot Measure 57’s (SB 1087) mandated treatment and recovery programs for inmates and parolees.

Funds from the tax would replace all of the $114.7 million in General Fund dollars currently spent on treatment, prevention and recovery programs. This would free that amount in General Fund monies for other purposes.

And beer tax funds would also pay for a needed $137.3 million in expanded and additional programs, recommended in a 2008 study, “Oregon Speaks: Community Addiction Services Investment Strategy,” conducted by DHS and others, thus eliminating any need for any more General Fund dollars for such purposes.

-------------------------------

Yes, it does reduce consumption: "http://www.modernmedicine.com/modernmedicine/Modern+Medicine+Now/High-Taxes-on-Alcohol-Reduce-Consumption/ArticleNewsFeed/Article/detail/575907"

And while we're at it: "http://tpmcafe.talkingpointsmemo.com/2008/09/16/medicine_for_wall_street_a_fin/"

If we are gonna tax based on the percieved harm a product causes , then let's start with good ol McDonalds. Those Heart Attack grease bombs damage MOST of the users with Weight Related Illnesses , where-as most craft beer consumers have lower blood pressure and less stress. Using Taxation to punish 90% of the users to pay for treatment for booze and fortified users is criminal !

Thanks Dyspeptic, you proved my point-"tax dollars have a way of filtering through in obtuse ways". The beer tax is mostly a replacement of existing General Fund taxes used for the same existing programs, then those replaced taxes collected will be redistributed, for any political whim.

The taxpayer gets it, the politicians don't think we do. Time is running out.

the tax per beer goes from less than a penny, to about 15 cents. That seems more than reasonable when compared to the tax on hard liquor.

I haven't checked your math but I certainly agree with your sentiment regarding liquor. I enjoy Oregon microbrew, wine, and - yes - liquor. But liquor is way, way overtaxed in this state (highest in the nation - WA is a close 2nd). It's about time they increased the beer tax - look at wine too. And they might as well legalize and tax pot while they're at it too.

When driving a car, responsible drivers purchase car insurance,
health and dental insurance, why not consider the .15 cents a mini treatment and recovery fee. Better yet, prevention education so our children as young as age six and teenagers will not go without treatment and recovery services. Like you, I remember voting to pass Measure 57, only to learn prisoners are not getting treatment and recovery services for lack of state funding. The more we spend on the play pen, the less we spend on the state pen. It is time the beer industry pays its fair share of the social and economic cost of it's products.

There should be a tax on anything produced with corn syrup or high fructose corn syrup. It causes more long-term obesity and health damage than any amount of beer. It's subsidized and encouraged by the government so it gets a complete free pass. No program talking about the obesity epidemic or health problem ever mentions the unhealthy and detrimental role corn syrup plays. Curious? Check out the DVD "King Corn" at your local library.

I've been wearing my "God Save the Beer" shirt every night that I'm out in a bar to raise awareness to this. If we don't make a stink this just might pass in this economy.
Where I got mine:
http://www.cafepress.com/littlebayroot


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