Senate proposes crazy taxes on beer, wine and liquor
By Owen Morris in News
Friday, May. 22 2009 @ 9:30AM
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I thought of that quote when reading that the U.S. Senate is considering a proposal to raise the federal excise tax on wine 233 percent, on beer 145 percent and on liquor 20 percent. Doesn't the Senate know what happened the last time the country was in a crippling economy and alcohol was hard to get?
It's also proposing a "sugar-sweetened beverage excise tax."
Those are just two ideas out of many in the Senate Finance Committee's 41-page report Financing Comprehensive Health Care Reform: Proposed Health System Savings and Revenue Options (PDF and recommended reading for insomniacs). The report was co-written by a Republican Chuck Grassley of Iowa and Democrat Max Baucus of Montana, who make it clear at the beginning that "not all the options in this document have [their] support."
That said, the proposed excise-tax plan does make things less confusing.
The Senators' argument is that wine, beer and liquors are all taxed at
different rates per gallon. They even include a nifty chart in the
report to show current tax rates per gallon and how much they differ:
The proposed plan would make a uniformed "$16 per proof gallon on all alcohol beverages," with only a few tax breaks for small wine and beer producers. For sugar beverages, the Senators' plan is to make them subject to the federal excise tax while leaving sugar-free beverages alone. No mention is given to how much the sugar excise tax would be.
Even though they're just rough ideas at this point, the uproar over the taxes has already started. Several trade groups have said beer and wine sales would plummet as people moved to liquor and its relatively mild 22 percent tax raise.
Beer Business Daily says overall sales of alcohol would drop sharply and that it would take a decade or more for sales to recover. That's what it says happened last time the federal government raised the federal tax in 1991, a time it points out "when we in the midst of another recession."
I'm noticing a trend.
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The proposed plan would make a uniformed "$16 per proof gallon on all alcohol beverages," with only a few tax breaks for small wine and beer producers. For sugar beverages, the Senators' plan is to make them subject to the federal excise tax while leaving sugar-free beverages alone. No mention is given to how much the sugar excise tax would be.
Even though they're just rough ideas at this point, the uproar over the taxes has already started. Several trade groups have said beer and wine sales would plummet as people moved to liquor and its relatively mild 22 percent tax raise.
Beer Business Daily says overall sales of alcohol would drop sharply and that it would take a decade or more for sales to recover. That's what it says happened last time the federal government raised the federal tax in 1991, a time it points out "when we in the midst of another recession."
I'm noticing a trend.
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