Wednesday, May 14, 2008

Detecting a Theme

Have you seen the news, read stories online or just stuck your head outside lately? If so, you'll certainly know that the nation's economy isn't growing as fast as it once was. In fact, some say the economy is going in the wrong direction. With this we're seeing a lot of states finding themselves in a shortfall, fiscally. In California a few weeks back a state legislator, Jim Beall, figured a sure-fire way to help the budget would be an astronomical tax increase on beer. (Funny thing about Jim, I heard him recently on the news, he was shocked that he had such a negative response - apparently one constituent threatened to beat him up. I wouldn't suggest violence as a protest, but it was clear he was getting the word.)

Today there's a new guy making the news with his supposed tax fix. Gov. Mike Easely, of North Carolina, wants to raise funds for teacher pay increases and a boost to the state's mental health program. To do this he is proposing an increase on the state's "sin taxes" for cigarettes and alcohol. The cigarette tax revenue would go toward the teachers funds and the alcohol revenue to the mental health program. Here's his breakdown:
  • 4 Cents more per bottle of beer
  • 3 Cents more per bottle of wine
  • 4 Cents more per bottle of liquor
  • 20 Cents more per pack of cigarettes
One thing jumps out, a penny less for a bottle of wine compared to a bottle of beer. Beer is mostly sold in 12-ounce bottles, whereas wine is sold mostly in 750ml. Wine typically has a much higher ABV than beer, too. There is no way you can convince me this is a proportionate burden, in fact I'd suggest that the beer drinker is having it stuck to him pretty good on this.

The other thing that jumps out is the whole notion that only those who enjoy alcohol or tobacco are being asked to help with the state's teachers and mental health system. I guess I'll never really get this, punishing adults who legally enjoy a drink or smoke, making them shoulder the load as a quick fix for a state's budget. If there are programs that will benefit the entire state, why not suggest we all pay for them? I mean, I know why not, but really, how does this even make sense to anyone? You want your kids' teachers to have a pay raise, pay for it. You want the state's mental health division to be better? Pay for that too. It isn't as though teachers are making less because there are smokers in the state, and the mental heath workers aren't understaffed because the people of North Carolina enjoy a drink or two.

I assume we'll see a lot more of this in the coming year. Even this morning's Brew Blog (by Miller) warns of a national excise tax war that will be waged in 2009, something that came out of the National Wholesalers convention in DC. I've stated before that my concerns are two-fold. First, I worry that we'll say nothing, assuming the taxes won't increase, or that their increase is simply inevitable. Second, I worry that legislators will propose astronomical tax increases in hopes that there will be a 'compromise', where we'll give up more than we ought to because it just sounds better than the original idea.