Oregon lawmakers recently announced a plan to significantly hike the tax on beer – the proposed increase might multiply the current tax some 20-fold. For individual beer drinkers, the estimated increased charge on a pint at various bars could be anywhere between 15 cents and $1.50 per drink, probably toward the higher end, especially for microbrews.
It might come as a surprise that a state so well known for its microbrew industry would have its lawmakers still drinking the century-old swill of the temperance movement. It certainly surprised the Emerald editorial board.
Probably the biggest problem with beer and alcohol taxes – or in fact, consumption taxes in general – is that they’re regressive. They hit hardest, and perhaps even target, people with little financial means. In some cases, this is simply because the tax is levied “equally” across the economic spectrum, such that people who are already most income-strapped must contribute the largest share of their personal earnings to pay for the government.
In this case, the tax even specifically singles out lower income people, as statistics suggest alcohol, malt beverages especially, can behave as an “inferior good” in the marketplace, meaning as consumers increase their income, they are less likely to consume the good. Therefore, by singling out this good for a tax, lawmakers appear to be either unaware or unconcerned that they might be effectively sticking it to the least fortunate. This may effectively turn both casual drinkers and already-struggling alcoholics into a debtor class on which Salem can politically shoulder the burden of paying for the government.
What’s more, legislators said they passed the beer tax to curb underage drinking, which is estimated to account for about 15 percent of all alcohol sold in Oregon. The mere thought that this will be even slightly effective is astonishing.
We understand alcohol can be a serious drug, and alcohol addiction is a serious disease that can result in emotional trauma, accidents, bankruptcy, serious medical problems and death. We recognize the costs alcohol might have for our communities in terms of drunken driving and underage abuse. But penalizing legal and responsible beer-drinkers just because a tax is an easy way to close state budget gaps is not a fair or efficient way to address these problems.
Lawmakers are practicing the worst kind of cowardice. They know we have to increase taxes or cut back government services to cover costs. Instead of accepting this reality, they seek to save voters from their responsibility to pay for the services they get by shoveling the costs onto the ol’ saloon drinkers in some Calvinistic fixation on the devil-juice. These “sin taxes,” such as the beer tax, are intended to discourage “sin” behavior, like drinking. But this line of reasoning is outdated and hardly a legitimate justification for government policy. To think we have lawmakers in Salem – in this case, Democrats – who insist on using temperance-era arguments as an excuse to increase taxes must raise doubt about their ability to create policy relevant to 21st-century realities.
Worse yet, the beer tax has serious consequences beyond its political absurdity. It can mean significant economic costs for one of Oregon’s most highly celebrated industries: microbreweries. Oregon beers are known all over the world for their established quality and expertise, and the industry is one of the most diverse in the entire Oregon economy. It would be a horrible crime to tax our esteemed craftbreweries out of existence, especially under a rationale that serves to do little more than provide skittish lawmakers a cover from the hard task of balancing the budget.
Targeting this one industry isn’t just politically unfair. It would be hugely detrimental to the future of Oregon’s economy. Craftbreweries and their suppliers are major employers and highly innovative businesses, developing award-winning microbrews that give Oregon business a competitive edge in out-of-state trade. Let’s not rain economic havoc on them just because we’re afraid voters might be too stupid to understand that they should help pay for the government.
In short, it’s time for the lawmakers in Salem to grow a pair and tell the truth about what it costs to run a government. They need to stop shoving off all their costs onto the “easy” taxpayers. Craftbrewing is an important industry for Oregon, so word to Salem: Lay off our beer.
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