Joe Two- Or Three-Pack
Joe Six-Pack is going to have to cut back a few beers if he lives in Oregon. The jerks the people there elected to represent them have voted in a 1,900 percent tax increase on beer. No, that is not an error or a joke. 1,900 percent. Going from $2.60 a barrel to a whopping $52.21. From the op-ed page of the WSJ:
The money is intended to reduce Oregon's $3 billion budget deficit and, ostensibly, to pay for drug treatment.For Oregon to enact punitive taxes on its homegrown beer industry makes as much sense as Idaho slapping an excise tax on potatoes or for New York to tax stock trading. Even without the tax increase, taxes are the single most expensive ingredient in a glass of beer, according to the Oregon Brewers Guild.
But Democrats who run the legislature are desperate for the revenues to help pay for Oregon's 27.9% increase in the general fund budget last year. If they have their way, every time a worker steps up to the bar and orders a cold one, his tab will rise by an extra $1.25 to $1.50 a pint. Half of these taxes will be paid by Oregonians with an income below $45,000 a year. Voters might want to remember this the next time Democrats in Salem profess to be the party of Joe Six Pack.
If anybody needs drug treatment, it's the lawmakers. In what way is it acceptable to tax one particular product far beyond any other? And yes, I know this is done throughout the country -- and it's unacceptable.
If there are particular costs associated with a particular product -- costs which will otherwise be passed on to the taxpayer -- yes, I think it's okay to expect them to be paid by the business. For example, if you're running a factory that is in some way taxing to the local environment, you should fund cleanup or protection of said environment.
But, 1,900 percent for beer? Just obscene.
Oh, and no, I don't drink a drop of the stuff, and haven't had an entire beer in my lifetime. Not even half a beer.
I loathe, loathe, loathe sin taxes. I think they're despicable and discriminating and an effort to force people to live the way the nanny state decrees they should. And I don't drink or smoke. I do, however, hate this kind of facism.
Sin taxes rank right alongside hate crimes. Hate crimes are worse because that's going even further to trying to control thoughts (otherwise an assault would be an assault) but sin taxes aren't much better. I say we do away with them both.
T's Grammy at April 15, 2009 5:15 AM
This is another case that fills me with righteous indignation, but it also makes me feel powerless. Obviously if the members of the Oregon legislature had campaigned on a pledge to raise taxes on beer 1900% none of them would have been elected. The same is true for many if not most of the policies that we liberty-loving folk oppose. "If elected I promise to require safety features for cars that make them less safe!" "If elected I promise to give your money to my supporters!" "If elected I promise to make you register with the government to buy allergy medicine!" "If elected I promise to raise your energy bills 40%!"
Yet they keep getting elected, and I can't think of a systemic reform that will solve the problem. Term limits are tempting but haven't helped California much. McCain-Feingold style campaign finance "reform" arguably made things worse, in addition to being unconstitutional. What we need is a catch-22: a powerful political movement designed to reduce the power of political movements.
Pseudonym at April 15, 2009 6:13 AM
"I don't drink a drop of the stuff."
You don't know what you're missing.
Dennis at April 15, 2009 6:37 AM
Sounds like there will be "Beer-Runners" who will race interstate for their brew. The only good I will see out of this is for the wise guy who will open a beer store ten yards outside the Oregon State's border.
Toubrouk at April 15, 2009 6:38 AM
Yes! The government racket.
Overspend the tax payers money and then tax the hell out of the taxpayer, so we can irresponsibly spend more of their money.
Then pat themselves on the back for bringing in all this extra revenue.
People get a clue on government spending... increased taxes aren't far behind.
David M at April 15, 2009 6:44 AM
The most annoying part of the sin tax is that they don't really want you to stop doing whatever it is you're doing--drinking, smoking, etc. They need the money. They're always raising taxes on alcohol or tobacco and excusing it by saying it's bad for you, but if everyone quit, their budgets would be in even deeper shit than most of them are now.
In response to tax increases on cigarettes, many smokers have been buying loose-leaf tobacco and rolling their own. The taxes on loose-leaf tobacco recently went up by 1500% or some such ridiculous number--politicians helping out the cigarette manufacturers.
What Oregonians should realize is that they have the power to kill this tax pretty quickly. Nobody needs beer. Don't buy it. Don't buy it today. Don't buy it tomorrow. Don't buy it next week, next month. Don't buy it until they kill the tax. Smuggle, brew your own, or drink something else. How long will the tax stay in place if the state loses money because of it?
LauraB at April 15, 2009 6:53 AM
Amy, you must've missed the increase in federal taxes on cigarettes that went into effect on April 1. It was $0.61 a pack. It's supposed to pay for CHIP (ie, health insurance for children). Talk about a tax totally disconnected with its use. (What's sucks the worse is that it's a federal tax so that even the local indian smokeshops can't avoid it, unlike state taxes.)
David Crawford at April 15, 2009 6:56 AM
Hi Amy,
Here in Oregon the general fund pretty much has one major funding source: State income tax (personal and business). Counties make up most of their funding (beyond their share of the State generl fund allocation) from property taxes. Needless to say, both fund sources are down. The beer tax is supposed to retain some very minimal service levels for State police, ODOT, health and human services, etc., many of which are chronically underfunded because when the timber industry disappeared in Oregon no other big industry came in to replace it. We have a lot of tourist industries that do very well during a good economy but . . . We have no sales tax in Oregon and the legislature is smart enough to know taxing beer will create very little outcry, while pushing through a sales tax (which I think we need, but I'm in the minority) which excludes things like prescription medication, food (but not junk food--don't need it to live) diapers, tampons and other feminine hygene products, condoms, etc. would not fly with most Oregon voters.
That said, I don't drink beer, either, but I wouldn't mind paying a latte tax because why not tax everyone's addictions?
Have a nice day--hug a tree!
hereinashland at April 15, 2009 7:10 AM
I wonder if the state legislature figured the impact of lost beer sales into their calculations. Obviously, an odious tax would stifle beer sales (although, as Toubrouk pointed out above, it would spur creation of state-line beer outlets).
old rpm daddy at April 15, 2009 7:29 AM
Amy Alkon
http://www.advicegoddess.com/archives/2009/04/15/joe_two_or_thre.html#comment-1643308">comment from David CrawfordThe problem with taxing cigarettes is that, while they do cost society greatly, the taxes really sock it to the poor. And LauraB is right -- the last thing they want people to do is stop smoking. So, when that homeless guy buys that single cigarette at the 7-Eleven, he's paying even more.
I urge Oregonians to start "smuggling" beer in bulk over the state lines.
And I urge idiot Angelenos to vote Villaraigosa out of office (Tony Teeth, our egostistical, junketing, tax- and fee-raising mayor) and Californians to dump our disappointment of a governor, Arnold Schwartzenspender.
Amy Alkon at April 15, 2009 7:36 AM
Amy Alkon
http://www.advicegoddess.com/archives/2009/04/15/joe_two_or_thre.html#comment-1643310">comment from Dennis"I don't drink a drop of the stuff." You don't know what you're missing.
I've tasted it. Yes, I do, and I'm thrilled. Skunky. I also don't smoke pot, which makes me feel like somebody hit me over the head with a frying pan and starved me for days.
Amy Alkon at April 15, 2009 7:40 AM
You guys are moaning about paying $1.50 USD for a pint? That's roughly a quid.
Last time I went for a beer, it cost me over double that (and that's outside of London).
Cigarettes (I don't smoke so I'm not 100% on this) are somewhere in the region of £3.50 Sterling per 20 pack.
I'll swap your prices for ours anyday ;-)
Cheers!
James H at April 15, 2009 7:45 AM
Hey Oregon,
It's not that hard to brew your own at all. Cheap, satisfying, and tasty. Google "home brew beer" and you'll find a score of sites with supplies and instructions.
Elle at April 15, 2009 7:55 AM
Shhh! Don't tell 'em, Elle! The government will find out and start taxing barley and hops!
old rpm daddy at April 15, 2009 8:03 AM
"If there are particular costs associated with a particular product -- costs which will otherwise be passed on to the taxpayer -- yes, I think it's okay to expect them to be paid by the business. For example, if you're running a factory that is in some way taxing to the local environment, you should fund cleanup or protection of said environment. "
Not to go offtopic, but this is precisely the argument for carbon taxes (and cap and trade). Right now we subsidize the national security, pollution, health and other problems associated with burning oil, and that skews the amount and type of energy we burn away from a free market equilibrium.
(However, I don't think the carbon tax amounts to $50 a barrel of oil, making it a less expensive tax to drink my crude instead of drink my beer.)
I think sin taxes and use taxes are slippery. It's one thing to offset "hidden"
subsidies, it's another to go all social engineering. The "sin tax" that seems to annoy me the most is the "use fee" for parking in a National Forest.
jerry at April 15, 2009 8:05 AM
The other real problem with this particular tax is who it hits, the homegrown beer industry.
Way to go Oregon, I am sure the lobbyists from Coors and Bud will buy you a nice vacation.
jerry at April 15, 2009 8:07 AM
Quibble: From the article, it sounds like a 1,900% *increase* in the beer tax, not a 1,900% tax ...
jen at April 15, 2009 8:07 AM
Amy Alkon
http://www.advicegoddess.com/archives/2009/04/15/joe_two_or_thre.html#comment-1643327">comment from jenThanks, jen - dropped the word when posting it. It's been fixed. Refresh your browser.
Amy Alkon at April 15, 2009 8:47 AM
If there are particular costs associated with a particular product -- costs which will otherwise be passed on to the taxpayer -- yes, I think it's okay to expect them to be paid by the business.
Businesses don't pay taxes. Their customers do. The price of a good or service includes all costs to that business of providing that good or service (including taxes and fees).
Conan the Grammarian at April 15, 2009 8:47 AM
Amy Alkon
http://www.advicegoddess.com/archives/2009/04/15/joe_two_or_thre.html#comment-1643329">comment from jerryThe "sin tax" that seems to annoy me the most is the "use fee" for parking in a National Forest.
Is it a tax beyond maintenance for parking (and keeping rangers on hand or whatever they have to do to police the parking lots)?
Amy Alkon at April 15, 2009 8:48 AM
Amy Alkon
http://www.advicegoddess.com/archives/2009/04/15/joe_two_or_thre.html#comment-1643332">comment from Conan the GrammarianA business' costs should be factored into the profits, including costs to others (like pollution). See the economist Pigou on that. The public should not be subsidizing your factory.
Amy Alkon at April 15, 2009 8:53 AM
If I was a drinker, living in Oregon, I would likely drink something other than beer if I was in a bar or restaurant. If possible, I would make my own beer at home or pick some up in another state if I live close to the line.
Even if I loved my beer, I would probably be stubborn enough to stop for a while just to avoid paying the tax.
I'm sure anyone planning to run in the next election will make an issue of this tax if the incumbent voted for it.
Steamer at April 15, 2009 9:06 AM
Speaking of taxes and public finance, Reynolds and McCardle link an article by the gifted blogger/reporter Hari about Dubai. (It's a good piece, worth dropping three names to sell)
Crid [cridcridatgmail] at April 15, 2009 9:08 AM
A friend of mine, the manager of the cafe I write at, told me he has a friend who owns a brewery up there, and may have to close it.
Amy Alkon at April 15, 2009 9:43 AM
"skunky."
Must have been Bud Light or Black Label. You need a better class of brew.
Dennis at April 15, 2009 9:44 AM
"You guys are moaning about paying $1.50 USD for a pint? That's roughly a quid."
No, everybody is moaning about adding another $1.50 on top of what they are already paying.
Dennis at April 15, 2009 9:45 AM
The taxes on loose-leaf tobacco recently went up by 1500% or some such ridiculous number.
It was from $1.10/lb to $24.78/lb -- a 2,159% increase on Roll Your Own. Pre-made was $0.39/pack to $1.01/pack -- a 158% increase. The whole list is here. It means that they need more smokers -- not less. This is in addition to the $0.50-$0.75 that smokers were already paying as a hidden tax because the tobacco companies had to fund the settlement they made with fed/states a few years back.
You guys are moaning about paying $1.50 USD for a pint? That's roughly a quid.
Last time I went for a beer, it cost me over double that (and that's outside of London).
That is in addition to the $2.00-$5.00 that they are already paying for a beer. It depends where/what the bar is already charging. The typical corner bar in the Midwest costs about $2.00. But if you go into a night club/"fancy" place they'll hit $5.00 or more for the same beer. But go to some places on the coasts and the prices start higher.
Jim P. at April 15, 2009 10:19 AM
Is it a tax beyond maintenance for parking (and keeping rangers on hand or whatever they have to do to police the parking lots)?
I don't know what it pays for, but I think it's a double tax and a regressive one.
The tax can be anywhere from $5 per day for park access to $25 per car to drive into the Grand Canyon or Yosemite (even to drive "through" the Grand Canyon or Yosemite as each park has at least one major route going through it. In Yosemite it's the Tioga Pass.
Basically, I think the taxpayers have already paid for care of the parks, and $5 to $25 fees discourage the people from using those parks. (In those cases where the parks are overused, I'd prefer reservations and lotteries than just discouraging people who can't afford to pay $25 from showing up.)
(Regardless of the cost of driving the Tioga Pass, I highly recommend checking your calendar, figuring out when the next full moon is, and driving through Yosemite on the Tioga Pass Road on a full-moon. (We saw a mountain lion jump *across* the road about a mile before the entrance to the park.))
jerry at April 15, 2009 10:52 AM
Its nice to see this finally getting some national attention. Its utterly ridiculous and I think it will get attention hereinashland of many, mainly when the local micro-brews (one of Oregon's few "industries" left) go out of business because everyone is buying the cheaper stuff to get a buzz.
I don't drink beer much, never have but I won't be buying any here in Oregon until this is repealed. We definately have funding problems in this state but we also have had a growing state government that needs to be cut back in many areas. We also have a governor who wants to switch gas taxes over to gps tracked milage taxes, a program that will cost money we don't have.
I'd be all for a state sales tax despite the problems those have as long as they abolish the income tax in the same legislation. Somehow, I don't see them doing that.
Sio at April 15, 2009 12:09 PM
A business' costs should be factored into the profits, including costs to others (like pollution).
They are. Costs are factored into the setting of prices.
I'm in agreement with your that a company which has a detrimental impact on the community around it should bear the price of ameliorating that impact. But I'm not kidding myself that some entity called "the company" will pay the bill. Customers will bear the burden of paying that bill. And perhaps they should. But there are costs to higher taxes beyond the taxes themselves.
If the company has to clean up the polution from production, it passes that cost to the customer. If it needs to keep that cost low, it moves to a less regulated environment and lays off its employees in the regulated environment.
Profit is merely what's left after costs are extracted from revenues. Raise taxes and you raise the cost of providing the good or services and, thus, you raise prices of that good or service.
There may be a small profitability cushion to absorb costs, but most companies reinvest profits into modernizing facilities, researching new products, etc. Taking away too much of that profit cushion leaves a company vulnerable in the long run (take a look at GM).
If a business spends too long selling a product or service below cost, it goes out of business.
Conan the Grammarian at April 15, 2009 12:13 PM
"A business' costs should be factored into the profits, including costs to others (like pollution). See the economist Pigou on that. The public should not be subsidizing your factory."
Gotta disagree with you on this one, Amy. It's a slippery slope. By the same argument, every one of us should pay a carbon tax just for breathing. And it feeds into the gender-feminist argument that men should pay higher taxes then women, because they're physically bigger.
Cousin Dave at April 15, 2009 12:15 PM
Amy Alkon
http://www.advicegoddess.com/archives/2009/04/15/joe_two_or_thre.html#comment-1643396">comment from Cousin DaveAnd it feeds into the gender-feminist argument that men should pay higher taxes then women, because they're physically bigger.
Oh, come on. That's not what we're talking about. Must everything be turned into a tract on the evils of feminism? Remember, I'm on the side of fair treatment for all, but the constant mention in off-topic discussions screams of a victimist approach to life.
Once we remove the "FEMINISTS ARE EVIL!" from this equation, it works like this: If your business brings in, say, 100 people every day, you need to provide parking for those people. It's just ethical to pick up your costs from your profits and not try to stick other people with them.
Amy Alkon at April 15, 2009 12:41 PM
Amy,
If businesses are forced to pick up the cost through legislation of their pollution, they will pass if off to their customers through higher prices. On the other hand, if they don't, their customers will still pay. Either way, we pay.
The only way to really minimize the problem is to privatize as much as we can so that businesses actually own what they are polluting (hence have a economic motivation to pollute less). I am aware that this becomes difficult with, let's say, owning the air, but hopefully you see my point.
Charles at April 15, 2009 1:54 PM
Amy Alkon
http://www.advicegoddess.com/archives/2009/04/15/joe_two_or_thre.html#comment-1643416">comment from CharlesTheir customers should pay. The costs should be built into the cost of the products not passed off onto others. Why would it be wrong for those costs to be factored into the profits of those causing them -- rather stuck on the rest of us?
Amy Alkon at April 15, 2009 2:17 PM
"The people hate the lizards, and the lizards rule the people."
I miss you, Douglas Adams!
Radwaste at April 15, 2009 6:06 PM
Their customers should pay. The costs should be built into the cost of the products not passed off onto others. Why would it be wrong for those costs to be factored into the profits of those causing them -- rather stuck on the rest of us?
At first I was going to disagree, and then I realized that I had been misreading you. The question is who should pay for the costs: all taxpayers, or just those who are the customers of the company? The customers, I think.
As a small-l libertarian I think one of the (few) appropriate roles of government regulation is to minimize damage to public resources like air. I agree with Charles that privatization and economic motivation to not pollute are likely to be the most effective methods. A little pollution doesn't hurt anybody, but a lot hurts everybody. Treating it like radio spectrum makes sense to me.
Pseudonym at April 15, 2009 6:06 PM
Part of the American Left's betrayal of the common man. Why beer only? Why not Merlot and the like, or the stuff the women like to drink, whatever that is? Because even to the Dems the rich and the women matter, the poor and the men do not.
Disclaimer. Drank (whiskey) for a few weeks twenty years ago, decided it was a very expensive way to fall asleep so gave it up, hence i have no personal interest in how much booze costs, but unfair is unfair.
Porky at April 15, 2009 6:08 PM
Well I dislike this tax in Oregon, but the reason why it is beer and not wine is plain and obvious and mentioned in the article: Oregon has a giant microbeer industry (and a relatively small wine industry.) So why beer? Not to wage war against the common man but because that's where the money is. It's Willie Sutton, not evul liberal plot.
And it could be claimed that by going after microbreweries and not the big beer folks, they are waging war against beer snobs since the common man is drinking Bud, Bud Light and PBR.
And note: I don't like this tax, but it's not some liberal plot against the common man. The liberals you are hating against are the ones ordering the microbrews.
jerry at April 15, 2009 6:19 PM
Their customers should pay. The costs should be built into the cost of the products not passed off onto others. Why would it be wrong for those costs to be factored into the profits of those causing them -- rather stuck on the rest of us?
Sound good in theory. Ideally, companies would pay for every aspect of their production.
But how many people are buying cheap bicycles built in a pollution-spewing plant in China instead of the expensive bicycles built in America in more eco-friendly plants? The answer is why almost every American bicycle maker has laid off its employees and moved overseas taking jobs and tax revenues with them.
How many people who complain about their electric bill would vote for the utility to be allowed to raise their rates to add pollution-figting equipment to their plants?
How many governments pass tough environmental legislation, then give a favored contributor or a relocating company waivers in order to say they "created jobs?"
Conan the Grammarian at April 15, 2009 6:20 PM
Ideally, companies would pay for every aspect of their production.
Or, to my earlier point, their customers would.
Conan the Grammarian at April 15, 2009 6:38 PM
The typical corner bar in the Midwest costs about $2.00.
I live in Chicago and if you can find me a bar charging two bucks for a beer I'm going to become a regular.
the wolf at April 15, 2009 8:45 PM
I'm a regular drinker, and do not give a shit. If prices go up so high they deter me from buying more, I'm fine with that. In fact, in California, I suspect they are...Jack Daniels now costs like $20 for a bottle that was $16 a month ago.
I will now drink less Jack. That is probably better for me anyway.
Alcohol is the opiate of the masses. A wonderful, wonderful opiate...but couldn't hurt us to drink less.
LYT at April 16, 2009 12:30 AM
I can't work up much sympathy for anyone having to pay $1.50 a pint for beer. In Australia, it is not unusual to pay $6 or $7 in many bars for a pint (and often they turn out to not even be a full imperial pint). Even taking into account differences in exchange rates, that is still a fair whack.
In some Scandinavian countries you are often looking at about $10 or $12 a beer. Some of the benefits of European socialism.
Nick S at April 16, 2009 12:42 AM
Nick, as mentioned above in the comments here, its an extra $1.50 per pint on average. We don't pay $1.50 per a pint of beer here in Oregon I assure you.
They're taxing each barrel a brewer (in state) produces.
Sio at April 16, 2009 2:21 AM
With this lop-eared douchebag in the oval office, the only thing I can do to ease the pain is drink more.
Between the increases on income tax lowering my take, and increases on taxes for everything I eat and drink, I'll have to choose between being drunk and being fat.
brian at April 16, 2009 4:44 AM
Sio, so it's $1.50 per pint in extra tax, not total cost. Okay, it's just that the original article was a bit misleading.
Nick S at April 16, 2009 5:17 AM
Oregon is a leader in the microbrew industry because Oregon State University has the best brewery program in the country. Since politicians are economic dunderheads, they will tax the successful businesses into submission. Since our unemployment rate is 12%, there no one else to go after.
Also our brew pubs are not what other people expect. They are family friendly places with kids’ menus. My sister was shocked when I suggested that I take her children to a “bar” for dinner. All the restaurants I take my kids to have a good selection of microbrews (or else we would not go there.) For example, the pizza joint that Obama campaigned at has 10 local brews on tap.
Curtis at April 16, 2009 4:24 PM
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