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Hops and Drano?

Proposed beer tax needs a new recipe

 

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.