Tuesday, April 15, 2008

Beer Tax

A California assemblyman is proposing an amendment to the state constitution to raise the beer tax 30 cents per can or bottle ($1.80 per sixer or $7.20 per case if you scholars did the math).

I guess I don't have a problem with taxing beer in order to help pay for some of the enforcement and health issues that beer brings, but the "per can" tax is a bit excessive, especially since it taxes beer and not wine or liquor. Let me propose an alternative method of taxation to suit Assemblyman Jim Beall's needs.

For argument's sake, let's assume that all beer is 5% alcohol, and all wine is 11% alcohol in order to hit the mean of both beverages.

Since Mr. Beall wants to get 30 cents per 12 oz can, what he really wants is 30 cents per 0.6oz of alcohol, which is the real cause of the aforementioned problems. Since a bottle of wine is usually 750ml or 25.37oz, and has an assumed alcohol content of 11%, that would mean that at Mr. Beall's level of taxation, every bottle of wine in the state of California would carry an additional $1.40 in taxes or $16.80 per 9-liter case.

According to the Wine Institute, in 2007 California sold 192.1 million 9-liter cases in the US alone. Being that California is about 12% of the US population I am allocating 23,052,000 of those cases to California, not taking into account that Californians probably drink more wine per capita than Texans.

That would mean that California wine's share of the tax would be $387,273,600, which does not include French, Italian, Chilean, Australian, or Argentinian wines.

So there you have it Mr. Beall: in order to make this tax more equitable, go ahead and propose a $387 million tax on a highly visible, wealthy, and beloved California industry.

Unless that is, are you beholden to this industry? I mean, I'm sure that some of your wealthy San Jose supporters own vineyards, or stakes in vineyards. I'm sure that you wouldn't want to piss them off! Also, I'm willing to bet that a large portion of your donors enjoy drinking wine, being that people with higher degrees and salaries seem to gravitate towards wine. You probably don't want to piss them off either!

Advocating for this bill could easily be seen by your competitors as a cheap shot to raise state capital by targeting the poorer "Joe Average" beer drinking population while letting the industry and your donors, who are much more able to pay mind you, off easy. You wouldn't want to do that.

My suggestion is this: stick to your Democratic guns and advocate the much more progressive $387 million tax on Napa Valley.

See how that works out for you.

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1 comment:

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