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Monday, February 16, 2009

What's Next? A Tax On Being Happy?

Posted by Patrick Alan Coleman on Mon, Feb 16, 2009 at 11:45 AM

2d45/1234813134-no-beer.jpg

That 12 oz. beer you're drinking (I know what’s really in that coffee cup), may wind up costing you an extra 15 cents if Ben Cannon, D-Portland, has his way and manages to pass House Bill 2461.

The proposed bill increases Oregon’s Beer Tax 1,800 percent: from $2.60 per 31 gallon barrel of beer to $46.61 per 31 gallon barrel. That’s a hell of an increase.

While it’s true that Oregon has the fourth lowest Beer Tax in the Nation and that the tax rate hasn’t changed since the seventies, its possible that such a huge increase could be a major blow to the healthy brewing community in Oregon. Not to mention Oregon's many beer drinkers... Who, let's be honest, probably need their beer more now than ever.

As it stands, brewing is one of the few industries in Oregon that hasn’t taken a massive hit during this recession. I have to question the logic of possibly hobbling an industry that is currently pumping money into the local economy.

I’d also be a bit more willing to discuss the tax if the revenue it generated were going somewhere that made sense. Instead, the monies would be shunted into alcohol and drug prevention, and treatment programs.

Aren’t there other places that this money could be used?

The bill quotes several figures as justification for the tax

… less than 25 percent of Oregon adults and only two percent of Oregon youth who need substance abuse services receive the help they need

… Governor's Statewide Leadership Team for Alcohol-Free Kids and the Governor's Council on Alcohol and Drug Abuse Programs show that increasing alcohol taxes reduces access to and availability of alcohol to underage drinkers

… underage drinkers consumed an estimated 15.3 percent of all alcohol sold in Oregon in 2005, totaling an estimated $278 million in sales and estimated profits of $135 million to the alcohol industry

… alcohol use by Oregon's eighth graders is 76 percent higher than the national average

Etc. etc.

Those are indeed some impressive figures. But I somehow doubt that increasing the price of a six pack is going to keep kids from buying booze. I was a kid myself. I remember how motivated I could be when trying to score alcohol.

Rather than giving the money to brain-dead bureaucrats, who are going to create more useless PSA’s that kids are going to (rightly) mock, I have a feeling there is a better way to keep kids from drinking... Or at least ease the motivations they might have to do so... i.e. boredom.

How about putting some of that money into schools, so that teachers can engage kid’s minds? Or into after school sports, music, or arts programs to keep them engaged. Or putting it into services that help parents who are too stressed out to keep an eye on their children because they don’t know where their next paycheck is coming from? Or putting it into job creation so that more adults will be occupied with something other than drinking (possibly overpriced) beer?

I can tell you one thing. The world is going to look much more bleak if one of the few things that has been giving you pleasure in life—a cold beer with friends in the pub, or sipped quietly at home while watching the Simpson's—gets more expensive to enjoy.

Anyone else have any thoughts?

 

Comments (33) RSS

Oldest First Unregistered On Registered On Add a comment
1
Several points here:

1) Who drinks a 12-oz beer in this town? Not me, unless I'm too drunk/bloated to finish one...more...pint.

2) While the tax sounds massive at the barrel level, on a typical $4.50 pint the additional cost is about 3-3.5%.

3) Economically speaking, as with every other attempt I'd expect a craft-brewers' adjustment to either put a barrel floor on the tax (ie, say 10,000 bbl/yr and under, you don't pay the tax), so weep not for Anheuser Busch and Coors.

4) If the tax had been increased gradually over time since the 70s, it wouldn't need to go up quite as quickly now--but the piper must be paid sometimes.

5) The public health costs from alcohol are MASSIVE, much more than cigarettes I discovered. The same programs for nicotine have resulted in lower usage rates, particularly among kids, where smoking is WAY down among youth in Oregon the last dozen years or so. And the prevention efforts of MADD and others, which I'm not always in agreement with, can make a strong case for reducing drunk driving and youth drunk driving in this country.

4) When the tobacco tax was up for debate in 2007, a more compelling argument for it IMO was that the proceeds of the tax were directly tied to its consumption--that is, prevention and cessation efforts. To argue that the tax should be less directly related, seems odd to me.

5) the bill says Oregon is 49th, not 46th in taxation rate.

6) If 15c makes the difference between fun and pain for you, you probably didn't have enough money to go out to the bars drinking beer in the first place.

It's time for this to happen. Protect smaller brewers, protect Oregon brewers, but the state can't afford the costs that alcohol place on all of us.
Posted by torridjoe on February 16, 2009 at 12:05 PM · Report
2
As an Alcohol and Drug/Mental Health Counselor, I fully support increasing a tax (that hasn't been raised since the 70's!) to fund treatment services.

As a beer drinker, I'd gladly pay an extra couple of dimes if I knew that it was going towards helping those unfortunate enough to be fighting addiction.

This is probably too big of a discussion to post on a message board, but check out the Oregon State Lottery policy on reserving revenue to pay for treatment. Seems fair to me; if you're going to supply the public with services or goods that are known to be addictive, why not be responsible and contribute to rehabilitation as well?
Posted by Rational Thought on February 16, 2009 at 12:10 PM · Report
3
Fuck this. In this economic climate they should be giving away booze to placate the masses. I demand free pints of beer.
Posted by Graham on February 16, 2009 at 12:20 PM · Report
4
Matt Davis, what is your take on this? As the Merc's resident homeless advocate, I imagine you might have a few ideas floating around regarding this issue.
Posted by montaqua on February 16, 2009 at 12:25 PM · Report
5
Fuck this. We want to do what we want to do without being hassled by The Man. Bring back the speakeasy. Stop paying to be fucked with every time you go out to have a good time. If enough businesses suffer, things will change.

First the no-smoking bit and now this. This type of tax and prohibition regulation creates illegal speakeasies, and I think that it's time that Portland party people stop paying the people that are trying to tax the party. Bring back the speakeasy.
Posted by LokNaar on February 16, 2009 at 12:38 PM · Report
6
They're not going to raise the price of beer a couple of nickels or dimes you fucking numb nuts. When does a beer cost $3.45 or some shit like that? Bars are going to raise it evenly, meaning a $.50 increase which blows. You fucking numb nuts above probably never go to bars. They're already raising prices due to increased costs of hops, etc. stay away from my beer assholes.
Posted by Joe Joe on February 16, 2009 at 12:55 PM · Report
7
Instead of raising the beer tax, we could just abolish the OLCC.
Posted by martin on February 16, 2009 at 1:29 PM · Report
8
Maybe the state government should raise the tax on one of the larger, often underreported industries, marijuana.

With all the problems associated with drinking and Oregon's history of low alcohol taxes, is this really something that would be SO detrimental ?

Posted by beyourownvalentine on February 16, 2009 at 1:38 PM · Report
9
I would happily pay this tax. Bring it on.
Posted by NIG GER on February 16, 2009 at 1:42 PM · Report
10
If ALCOHOL is the problem, why is BEER the only beverage getting hit with a tax? Plus, the wording implies that this tax will pay for SUBSTANCE abuse, so the beer-lovers will be paying for METH heads, too.
That, and I don't know, a 1600% INCREASE seems like a bad idea in that it will completely FUCKING CRIPPLE the Oregon Brewing Industry.
Hey congresspeople... BABY STEPS!
Posted by Absent Mindful on February 16, 2009 at 1:50 PM · Report
11
I don't drink 12 oz beers either. It is like ordering half a shot of whiskey, who does that? However, even on New Years this tax will only add about $1 to my evening, and lets face it, at some point I might need treatment, (or a new liver,) so I should probably pay this tax. Of course, I agree about funding schools being a better way for keeping kids from drinking, but I also think that education children is a good way to keep our economy running, so I've got some pretty wacky ideas out there. As long as this isn't a sneaky way to make all the people that are making a couple batches a year in their basement file a bunch of paperwork, I'm fine with it.

(I just did my taxes and I donated the kicker again this year. So feel free to dismiss me as some commie or something.)
Posted by Matthew D on February 16, 2009 at 1:55 PM · Report
12
There are a lot of better ways to spend the money. Oregon is still one of the hungriest states in the union, and mental health funding would reduce the homeless problem. The other states that instituted a smoking ban in bars felt the backlash in gambling revenues. Oregon depends a lot on those, so why not use the money for what's about to be displaced?

There's a funding crisis for cops too (as much as I hate them) and our educational system is still pretty lame on a national level. I wonder how much it costs to fund OLCC each year?

Support your local brewer and just pay to drink at his house (if he even charges you)....
Posted by LokNaar on February 16, 2009 at 2:04 PM · Report
13
Oregon's drug and alcohol treatment programs could definitely use the money. Back in November, Hooper Detox - the first place addicts land when they're trying to access the city's social services - was turning away 10 people a day from getting help because they didn't have the funding to treat them. Think of the 15 cents as a mini donation to lowering Oregon's crime rate.

In case you're interested, here's an article I wrote a few months ago about lack of funding for drug treatment despite a doubling of heroin overdoses in Portland:
http://www.portlandmercury.com/news/pins-a…
Posted by s.mirk on February 16, 2009 at 2:09 PM · Report
14
Then why not tax 40 oz. bottles and 24 oz. cans of malt liquor and fortified wines? Or if you support a top/down theory, tax top shelf liquor as well as cigars which are exempt from the cigarette tax? They're just taxing the people in the middle yet again and I'm sick of it.
Posted by LokNaar on February 16, 2009 at 2:19 PM · Report
15
An increase of this magnitude could be too much of a shock to our brewing industry at an especially delicate time. They should scale it down.

Besides, if I find myself out of work, the last thing I want is to be paying more for drowning my sorrows. Damn, give us a fucking break already. I suppose it's time to homebrew.
Posted by Suburban Porn King on February 16, 2009 at 2:27 PM · Report
16
Can't they do some sort of deal where they tax per ABV? Like one penny per actual ounce of alcohol you're buying.

So a bottle of vodka would be taxed 40 cents and a six pack of beer would be taxed 3.6 cents. Seems fairish to me.
Posted by Graham on February 16, 2009 at 2:30 PM · Report
17
Whoops... make that 10.1 cents tax on a bottle of vodka. Don't know what I was thinking.
Posted by Graham on February 16, 2009 at 2:32 PM · Report
18
They could tax per APV, but that wouldn't be minority enough for Portland taxes. It keeps folks from looking at other tax expenditures and breaks for the rich, i.e. the Tram, stadiums, the Pearl district and assorted loopholes. Yeah, we need the money, but who is it coming from? A guy who could afford it or a guy who's trying to get by?
Posted by LokNaar on February 16, 2009 at 2:46 PM · Report
19
@Sschting

I'm not really sure what you're trying to say there. But to clarify a couple things; the proposed taxes will be statewide measures, not just Portland; the techincal term for alcohol in a liquid is ABV (alcohol by volume).
Posted by Graham on February 16, 2009 at 2:56 PM · Report
20
You've got to be fucking kidding me. No way!
Posted by Will Radik on February 16, 2009 at 2:58 PM · Report
21
My bad Graham. What I was trying to convey is that Portland seems to go for taxes that only affect and come from a minority of people within the city. The school tax was one; most people here are childless. The cigarette tax, the tax exemption in the Pearl district's real estate, and the 12 oz. alcohol tax.

It's easier to tax the few than the many because that would cost some serious votes across the board and the few seem more like the annoyed than the mass.

They ignore luxury expenditures as if they were something to be protected rather than taxed.
Posted by LokNaar on February 16, 2009 at 3:10 PM · Report
22
Oh, and statewide is just as jank as city-wide on this one. Just a trend that I've noticed that needs to stop with Oregon as a whole. If you're taxing the hooch, you tax all of the hooch. If you tax smoking, you tax all of the smoking; don't just exempt cigars and smoking @ golf courses.
Posted by LokNaar on February 16, 2009 at 3:14 PM · Report
23
Oregon beer tax could shut down one of our best industries
The state of Oregon (and in particular Portland) is pretty much the microbrewery capital of the world. We have more brew pubs per capita than anywhere in the world (Yes, including Germany and Ireland). The Oregon Lottery spent tons of money to build up Oregons Brewery export business. That means money brought into the state from elsewhere providing jobs.

Now they want to raise the tax per barrel on beer in this state. Approx. 1900% From what is currently around $2.60 a barrel to over $52.00 a barrel. (That's 31 gallons or 2 Kegs in a barrel if you were wondering.) This would change Oregons beer tax from one of the cheapest in the nation to one of the most expensive. The national average is $7.87.

During the recession the beer microbrewing industry is one of the things that hasn't had major problems. And, Oregon exports a ton of it.

Here are a few statistics on what they will do to our Oregon micro-breweries tax liability on beer sold.
(based on 2008 in-state sales estimats):
New Old Lompoc Brewery: from $5,330 per year to $107,030
Hopworks Urban Brewery: from $7,857 to $157,778
Ninkasi Brewing: from $18,460 to $370,691
Rogue Ales: from $34,091 to $684,577
BridgePort Brewing: from $60,315 to $1,211,167
Deschutes Brewery: from $215,990 to $4,337,241.

Pay close attention to that last one. Deschutes Brewery is set to expand and is exploring options. The company employs about 280 workers, including 150 in Bend. The rest are in Portland, where the company opened a brewpub last year as well as a few other markets. Currently they have 35 to 40 existing tanks, which produced about 180,000 barrels of beer in 2008, and are nearing full capacity. Expansion plans if they stay in Bend are to add 10 new 45-foot-tall fermentation tanks outside the existing facility. Other growth within the next five to 10 years could include building a new packaging and warehouse facility on 7 acres immediately east of the existing brewery building. THATS NEW JOBS ANDNEW MONEY BROUGHT INTO THE STATE FROM OUTSIDE ITS BORDERS.They have stated that a Bend expansion of facilities is preferable but are now looking at expanding elsewhere or contracting with another company somewhere else to do part of their brewing.

This proposed tax could shut down much of the industry in Oregon. Also making us less marketable by driving up the price of Oregon Beers.

Using 2007 figures, the Deschutes Brewery is the seventh largest craft brewer in the U.S.Sierra Nevada Brewing in Chico is second, and Full Sail Brewing in Hood River is ninth. I would be very interested to see statistics for McMenamins and hear what they have to say on the subject.

An article online by Rich Sellers provides the following -
Jamie Floyd, owner and brewer for Ninkasi Brewing in Eugene has further concerns. “This is being promoted as a 15 cent beer tax, but it’s not,” he says. “Oregon doesn’t have a sales tax.” He continued, saying it’s a business tax levied on Oregon brewers that will be passed along to wholesalers who will pass costs along to retailers, meaning consumers could see dramatic price increases for their pints and bottles of beer.

A 2007 article provides the following -

“Portland has more breweries than any other city in the world. Portland is the largest craft beer market in the U.S. Oregon is the second largest producer of craft beer in the U.S. and Oregon is the second largest craft beer market in the U.S. No wonder Oregon is known as Beervana and is a destination for craft beer lovers from all over the U.S. and the world,” said Brian Butenschoen, Executive Director of the Oregon Brewers Guild.

“Our healthy brewing industry is good for not only beer drinkers, but the state as a whole, because it provides almost 4300 family wage jobs, a lure for tourism and an outlet for local products such as hops, malted barley, yeast and glass,” he added.

He also cited the fact that almost 11 percent of all beer consumed in Oregon is Oregon-brewed craft beer. The national market share for all craft beer is 3.5 percent, according to the Brewers Association.
Let's also not forget the hops, wheat and barley growers the beer industry supports locally. Or how about the glass industry. Willamette Hops is a big industry, so is Oregons brewers yeast industry.

How many jobs are they looking to have us lose. Are our reps in the state government insane?

What's worse Democratic Sen. Rosenbaum is a sponsor. She has 5 small breweries in her district: Lucky Labrador, Roots, Clinton Street, Hopworks, and Philadelphia's. E-mail her and let her know what you think
sen.dianerosenbaum@state.or.us

The bill is sponsored by:
Representative BEN CANNON
District 46
phone - 503-986-1446
email - rep.bencannon@state.or.us

Representative MICHAEL DEMBROW
District 45
phone - 503-986-1445
email - rep.michaeldembrow@state.or.us

Senator JACKIE DINGFELDER
District 23
phone - 503-986-1723 & 503-493-2804
email - sen.jackiedingfelder@state.or.us

Senator BILL MORRISETTE
District 6
phone - 503-986-1706
email - sen.billmorrisette@state.or.us

Senator DIANE ROSENBAUM
District 21
phone - 503-986-1721 & 503-231-9970
email - sen.dianerosenbaum@state.or.us
More...
Posted by jeff on February 16, 2009 at 3:18 PM · Report
24
Well, like I said; this is a propsed state-wide tax on beer manufacturers. So the proclivities of tax officials in PDX isn't super relevant.

Also, this tax is to be levied at the manufacturers level where the usual unit of measurement is in barrels (BBLs). A barrel as defined by US tax law is 31 gallons (or two kegs); so there is "12 oz alcohol tax".
Posted by Graham on February 16, 2009 at 3:19 PM · Report
25
Jeff, you're from the OBG, aren't you?
Posted by Graham on February 16, 2009 at 3:23 PM · Report
26
You're absolutely right Graham; the proclivities of PDX taxers are not the state's, but as PDX goes, so does the state due to pop. density. At any rate, Jeff is straight up about the implications to our state economy and this would be disastrous. Any tax on the hooch would be bad, and I just don't think that PDX drinkers are up for it, or anyone else that the brewers export to.

I've noticed more and more speakeasies popping up around town and due to the economy and the restrictive stance on smoking, I've begun to frequent them more and more. The rooms are getting crowded too, and if these absurd regulations and taxes on the few legal vices we have continues, the industry will expand until it becomes a problem.

We want to do what we want to do without being hassled by The Man. And we want to get loaded.
Posted by LokNaar on February 16, 2009 at 3:36 PM · Report
27
I agree 100% that the proposed tax would have the immediate affect of stifling growth in the brewing industry. However, seeing as how the current tax rate is VERY low, I would not be opposed to a more reasonable rise in the tax rates. Also as long as the rise in tax rates was put on ALL food-grade alcohol and not just on malt beverages.
Posted by Graham on February 16, 2009 at 3:54 PM · Report
28
Answer: Brew your own beer.
Posted by that was easy on February 16, 2009 at 6:13 PM · Report
29
Sschting, where does one obtain info about these speakeasies. I've been looking around for a place to smoke and drink for a while and unfortunately a lot of the small bars I ask to do this are afraid of losing business.
Posted by Joe Joe on February 16, 2009 at 8:58 PM · Report
30
Costs like this don't just get passed straight along to the consumer, so by the time it reaches your glass, it won't be 18 cents a pint. Every business along the way just looks at his costs and he has to maintain those COGS (costs of goods sold) at a certain percentage to remain profitible. So that 18 cents is more likely to be about 50 cents when it reaches the consumer. Either that, or you have businesses that are already on the edge, losing (more) money, laying off workers, buying crappier products, etc.
Posted by extramsg on February 17, 2009 at 1:48 AM · Report
31
I learned it by watching you!

http://www.youtube.com/watch?v=Y-Elr5K2Vuo
Posted by krazyklown on February 17, 2009 at 8:28 AM · Report
32
Haven't we beaten the "Sin Tax" idea to death by now? Is Oregon's economy So Robust we need to extract more of $ from it's residents who live here for quality of life instead of chasing the big-bucks elsewhere. You cowards in Salem keep beating the Sin Tax drum because you figure it will effect a small enough number of people that you won't feel a big back-lash. When are you going to be fair and spread your tax increase needs to all Oregonians instead of trying to target specific groups you feel are safe to attack? I think it's time to get real and bring on a sales tax in Oregon. I hate it and I KNOW the Oregon leg. will abuse and misuse it. But a one cent tax on sales frozen for the next 10 years would be fair and spread the burden. It's time to quit coming up with all of these silly work around Oregon taxes that are the same pig with a different shade of lipstick.
Posted by Get Real on February 17, 2009 at 11:03 AM · Report
33
What the microbrew industry is supposed to pay for heroin addicts? I highly doubt that the rehab place was turning away 10 IPA addicts a day.

A thriving industry, creating thousands of jobs, and bringing tourism dollars; an industry that has never asked for subsidy or tax breaks , shouldn't be made to pay for failures of society.

I am betting the vast majority of those addicts who need treatment are meth and heroin addicts
Posted by Murkfish on February 18, 2009 at 9:13 PM · Report

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