DRAFT Magazine

It’s been awhile since we discussed beer taxes but the issue has popped back up in the news.

Two Maryland Democrats are proposing a 10-cent per drink hike in the state’s alcohol tax. The extra revenue would help prevent the elimination of some programs that might be cut due to a $2 billion dollar budget shortfall.

Currently, residents pay roughly a penny per drink, a levy that hasn’t been increased on wine and beer since 1972. Last year, a measure to raise taxes by a nickel failed, but advocates for the hike hope that the state’s precarious financial position will encourage public support.

We. Are. Floored.

The Badger Herald — one of the finest college newspapers in the country — features an editorial written by the editorial board arguing in favor of the state’s proposal to increase the beer tax. The piece argues that something needs to be done to combat the state’s alcohol problem, and the money raised by the tax can help. It’s a pretty standard argument that, unfortunately, features some relatively flawed logic and stereotyped conclusions.

The principle detractors to the bill — namely beer companies and the Wisconsin Tavern League — continue defending an indefensible position. It’s difficult to argue that the tax — combined with the nation’s shattered economy — will force beer companies to lay off jobs when logic would suggest that alcohol consumption skyrockets when people are unemployed and downtrodden.

Regardless, it’s always nice to see college kids taking a stand.

On Tuesday (also known as today), the Wisconsin State Assembly will meet to discuss raising the state’s beer tax by 2.5-cents per bottle. The gathering will be the first public hearing on increasing the tax in 30 years.

Rep. Terese Berceau, D-Madison, and state Sen. Fred Risser, D-Madison, sponsored the bill.

“My bill proposes that we add a tax on beer because that is priced at the third lowest in the nation … [and] beer is the alcohol of choice for the binge drinker,” Berceau said. Wisconsin has the highest rate of alcohol consumption, binge drinking and heavy drinking in the United States.

Gov. Jim Doyle, as well as a coalition of brewers, recently came out against the plan.

In our ongoing coverage of the movement to increase beer taxes around the world, it’s come to our attention that craft breweries cannot compete. This isn’t good, obviously.

Two recent articles highlight the problems smaller breweries face. One, op-ed written by Dave Engbers , director of marketing at Founders Brewing Co. in Grand Rapids, argues that a higher beer tax “threatens thousands of additional jobs that depend on Michigan’s beer sector, from those in agriculture and manufacturing to those in transportation, distribution, and retail.”

The other, coming all the way from the Czech Republic, notes that because of the 42 percent tax increase on beer and wine “small independent breweries that don’t have the capital backing of large international corporations, may be unable to shoulder the 15 million-18 million Kč in yearly expenses the tax increase will bring on.”

What are your thoughts on the matter? Should craft breweries get a break on taxes while the “big boys” pay more? Or is this fair?

In order to help balance the budget, Michigan Gov. Jennifer Granholm proposed doubling the beer tax from 1.9 cents per every 12-ounce can or bottle to 3.8 cents.

According to a story in the Detroit Free Press, however, that plan is dead in the mash turn.

“Insiders said Granholm has killed her beer tax proposal in favor of other tax increases, such as a sales tax on entertainment tickets (sporting events, concerts, etc.), to help balance the budget,” the article states.

Beer-related jobs, which industry watchers worried would disappear if the tax passed, are safe. Of course, the dude pictured might need to invest in some more giant foam costumes (or maybe just head to Wisconsin).

Gov. Jennifer Granholm has a plan to raise $42 million for the troubled state of Michigan: double the beer tax from 1.9 cents per every 12 ounce can or bottle to 3.8 cents.

The opposition to beer tax increases has spoken up before, but as the state falls further and further into financial ruin, you’d have to think it will be increasingly difficult to argue against the higher tax.

That said, the opponents have an ally in Speaker of the House Andy Dillon, who opposes the plan because he believes it would put brewers, wholesalers, and retail stores in his state at a disadvantage.

Michigan hasn’t raised its beer tax since 1966, when 1.9 cents would buy a whole lot more.

The United States isn’t the only country dealing with rising beer taxes. According to a report in the New Zealand Herald, the island’s government will raise excise taxes on alcohol by 2.8 percent tomorrow.

In response, most manufacturers will pass the increase onto vendors, who will turn around and raise prices for consumers.

“My understanding is that most manufacturers are going up similar amounts or more — I certainly know that Lion (Nathan) and DB (Breweries) are increasing their prices by at least 3 percent, and we’re certainly expecting that retailers are going to have no choice but to pass that on to consumers,” Hospitality Association of New Zealand chief executive Bruce Robertson said.

In other words, no one wins.

You win some, you lose some. New Jersey lawmakers are considering a proposal that would raise taxes on beer, only this one seems to create serious problems for the craft brewing community, specifically.

According to the plan, the excise tax would triple on beers that have an alcohol content lower than 4.5% ABV and increase even more for brews above that limit. Craft breweries, of course, frequently make beers containing alcohol content well above 4.5%.

“If such a proposal becomes reality, there is no question that many small brewery businesses will suffer, some will close and consumers will face higher prices and diminished choice in the marketplace,” Charlie Papazian, president of the Brewers Association, said.

Just another reason to avoid New Jersey, we guess.

[UPDATE: As you can see from the comment below, we mistakenly thought this tax was specific to the state of New Jersey, when actually it's a nationwide tax. The commentor points out craft beer advocates should write to their Congresspeople, something we've encouraged you to do in the past. Sorry for the confusion. And, for the record, we think New Jersey is a lovely state.]