Monday, June 22, 2009

Excess Beer Tax Deceased

Last week the news came out that the insane 20X increase in Oregon's beer excise tax, HB 2461, was officially dead. Get ready, in two years the cycle will continue, and there will be another attempt to raise it again, to raise money and stick it to the sinners of the state. Since Oregon's initiative system is so easily gamed and the population will vote against any tax, the Oregon Brewers Guild should pre-empt the next debate by proposing a constitutional amendment that forbids or impedes future beer tax efforts. Why not?

There is no denying that the state's finances are a wreck. But the beer excise tax is the wrong place to start working on that problem. Instead of focusing on such a tiny piece of the puzzle, some legislative actions that would have a much greater effect are:

  1. Get rid of the insane kicker.
  2. Tax corporations fairly.
  3. Consider a sales tax.
I hate the idea of a sales tax, but it makes more sense than a production-side tax like the excise tax, and would do more good in terms of smoothing out revenue during rough economic times. It looks like corporate taxes are going to get some tweaking by HB 3405, it will be interesting to see if that helps rebalance the income tax load -- 95% of which is currently borne by individuals in Oregon. And the kicker -- what madness. No household or business could survive a strategy that forced them to have a $0 bank balance at the end of every year. The kicker has one reason to exist, and that is to bankrupt the state government. Is that a good thing?

Jeff Alworth linked to a very nice article by that beer-tax-raising devil Ben Cannon. In that article Rep. Cannon -- who somehow represents a chunk of Portland devoid of breweries and brewpubs -- admits to several flaws in his legislation. He admits that taxing the production side is a terrible idea, and grudgingly admits that a 15-cent per pint excise increase gets magnified before the consumer pays it, though he still doesn't have a businesslike grasp of how prices are set. He concludes by saying that he continues to support an increase of some kind. Gird yourselves, it's coming back in two years.

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