February
25, 2009
The word ‘Cheers’ does not
come to mind when considering proposed House Bill 2461.
The bill before the Oregon Legislature would result in a tax
increase on malt beverages equaling 1,900 percent.
Under 2461, the tax on a
barrel of craft beer would increase from $2.60 to $49.61.
But HB 2461, like a quality
ale, needs time for refinement.
Legislators, like
bartenders, need to know when it’s too much.
There is no disputing that
the makers of alcoholic beverages should play a role in paying
for programs to help relieve alcohol addiction and its effects
on society. Addressing treatment and prevention programs is the
chief rationale behind the massive malt beverage tax hike, and
as a basic goal it does make sense.
But the Legislature should
push this glass aside and take another look at the menu. Taxing
craft beer makers in Oregon in this way will probably lead to
less expansion and employment.
That menu could include
other “sin” taxes on products such as soda pop and junk food,
which contribute in their own ways to social and health problems
in Oregon.
With the economy the way it
is, this is not the time to penalize an industry that is doing
well and has worked hard to get there.
Why do something so drastic
to a true Oregon success story, its craft brewing industry?
Granted, the product in question is an alcoholic beverage, and
alcohol in general does contribute to social ills. Many people
are, understandably, opposed to the production and consumption
of such products and thus view a big tax increase as a
reasonable method to pay for needed programs.
But the proposed increase
is unreasonable. For one thing, it comes all at once. Something
that would affect businesses to this extent should at least be
phased in.
The state should be willing
to dedicate a higher percentage of the beer, wind and liquor tax
to the programs themselves — currently five percent of the total
— and not rationalize a 1,900 percent increase as a way to
bolster the sagging general fund.
The tax as proposed would
unfairly target an industry that provides jobs for the provision
of beverages, and food, of high quality, served in appealing
hostelries.
It helps to consider the
ingredients in a typical ale — just water, hops, malt, barley
and yeast — compared to meth, which includes such things as
drain cleaner, gasoline, battery acid, Tuolene (found in brake
cleaner), iodine, and cold tablets.
The guy buying a six-pack
of Oregon-made ale at the corner market has virtually no
connection with the guy who has been convicted of manufacturing
and selling methamphetamine out of his car trunk.
Making the consumer, and
the businesses manufacturing a legal and well-made product, pay
for treatment of a meth addict is mixing apples and oranges — or
hops and Drano.
The state should consider
separating alcohol from other substances in assessing any
increased tax affecting a healthy industry such as craft
brewing.
Scaling back the increase
and customizing it in a germane way to meet a specific need
makes much more sense and would have a far lower impact on the
brewers.
The same kind of creative
thinking that has fostered craft brewing over the past 20 years
should also be applied to funding treatment and prevention
programs.
As Sen. Rick Metsger
states, a “reasonable” beer tax increase is in order.