Monday, February 16, 2009

Rubbing Salt In The Wounds

Although, I'm not sure who's wounds, to be honest.

Jeff Alworth, over at Beervana, a blog based out of Oregon, is getting all uppity about beer tax increases in Oregon. Apparently, the fine legislators in Oregon are proposing a beer tax increase there that sounds awfully familiar:
Backers say the extra money would help defray the $5 billion in health care, law enforcement and social services that untreated substance abuse costs the state each year.
And Jeff gets downright indignant (rightfully so, I might add):
There may be some hare-brained calculation somewhere that adds up to a total expense of $5 billion a year in total costs, but it damn sure isn't the state's cost. And, not to put too fine a point on it, but the cost, whatever it is, damn sure isn't all the fault of beer makers.

He goes on to point out that this what the West Coast pays in state beer taxes per barrel:
Idaho - $4.65
Nevada - $4.96
California - $6.20
Washington $8.08
Oregon - $49.61

Wisconsin? About $2 per barrel. It's actually less than that for most craft breweries because if you produce less than 50,000 barrels you only pay $1 per barrel in tax.

So, sorry Jeff, maybe some of those Oregon breweries might want to relocate to Wisconsin? And, yeah, we still have it pretty good here. But, strangely, even with these huge tax discrepancies beer here still costs about the same as it does there. Or, maybe the breweries that complain about taxes here, might want to consider the fact that it could be a lot worse.

[ed note: there a few complicating factors in the math - namely, Oregon doesn't have any breweries the size of Miller to "subsidize" the tax rolls like we have in Wisconsin; so, as much as craft brewers like to complain about Miller and Leinie's - Miller keeps you, at least in some sense, from having to pay higher taxes]

4 comments:

  1. Hey Jeff, I think $49.61 is what Oregon brewers would pay per barrel if the tax increase passes. Most of the info I can find claims the current rate is $2.60 per barrel.

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  2. Yes, that is correct. IF the bill passes, it would rocket up to $49+ per barrel. Sorry if that wasn't clear from the article.

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  3. This is a good way to push breweries out of the state. The question I have is if a wholesaler import beer do they have to pay a higher import tax?

    Is this a way to make the state dry in a round about way?

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  4. Well, Anonymous, you bring up a very good point. To the extent that the two interests line up in this case, I think it very much is a quasi-prohibitionist tactic. I'm not sure on the cross-border taxation, but I think you pay tax in the place where the beer is sold; if I'm not mistaken, I think, for example, that WI breweries pay tax on all of the beer that they remove from the brewery, but they are credited for any beer that is sold out-of-state. Then, any brewery coming into the state would pay beer at WI rates. I think, don't quote me on that.

    Though, I can't imagine that Oregon's goal here is to eliminate breweries. Oregon has a very high proportion of breweries per capita and I would think the brewing industry represents a not-insignificant portion of its GDP. I think that this more of an attempt to leech off of a perceived growth industry at a time when very few industries are growing.

    But, going back to your question, especially as it is relevant here in WI. I definitely think that the attempts to raise the beer taxes here in WI is an attempt to moderate the growth of the brewing industry here. There is a significant "New Dry" movement here that is attempting to downplay the cultural importance of alcohol in general and beer specifically. "They" know that going after the industry head-on will never work (it is a cultural phenomenon), so they try to be more passive-aggressive by playing to other emotions in a way that has a similar effect.

    If this sounds familiar it should. The federal government did the same thing with the PATRIOT ACT by telling us that it needed to "enhance intra-governmental information sharing" in the name of National Security when in fact it laid the groundwork for domestic wiretapping and other destructions of personal rights; both things that the populace never would have agreed to outright.

    Now, I'm not equating Kathleen Falk or Teresa Berceau to George Bush and Dick Cheney. But, I'm just pointing out that the tactics are similar.

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