Opinion

Mammoth beer tax hike threatens state economy

Well, this shouldn’t really come as a shock to anyone: Along with Missouri and Wyoming, Wisconsin has one of the lowest beer taxes in the country. Whether you find yourself in Stoughton or St. Louis, you can rest assured knowing you’ll only be taxed six cents for every gallon of Miller (or Bud) you purchase. That is a far cry from the two cents you pay in Laramie, but hey, at least our tallest building isn’t a dorm.

Right now, Wisconsin’s place of prestige on the Tax Foundation’s Internet database is being threatened. State Rep. Terese Berceau, D-Madison, has introduced legislation to raise our state tax on beer. I suppose this is where I, as a college kid, should jump in with some libertarian tirade about my right to drink and, if I paid attention in history, an ominous line or two about taxing liquor and Shay’s Rebellion. But even though I didn’t pay attention in history, I don’t think this is a horrible idea.

Wisconsin clearly loves its beer. We have Miller breweries in Chippewa Falls and Milwaukee and enough microbreweries to drown the Germans (just in case). On the other hand, Wisconsin’s reputation is closely aligned with the kid who always takes one too many beer bongs and passes out after the first quarter, albeit not before puking on your shoes first. “Looking at the measures the way you did, Wisconsin is the worst,” University of Minnesota epidemiology assistant professor Traci Toomey told the Appleton Post Crescent last year when discussing alcohol issues.

So, we should do something about that.

Raising the alcohol tax in any capacity is something our state legislatures haven’t done in the last 40 years. Yet our alcoholism and drunken driving rates have become a national punch line and our DWI laws are softer than Pau Gasol. And millions of additional dollars of tax revenue for alcoholism treatment and prevention would be a godsend for Wisconsin. So a tax increase is certainly warranted.

However, a 500 percent increase is certainly not. It turns out while many recognize our need to deal with alcohol-related issues as a state, Berceau has picked herself an uphill battle by seeking a raise from 6 cents a gallon to a whopping 32 cents. Beyond the problem of people simply not wanting to pay an extra $8 for a keg, those aforementioned breweries (micro and macro alike) are not sailing the smoothest of financial seas right now. It’s highly doubtful that a two- or even threefold hike in taxation would make a dent in beer sales, but it’s hard to see how a fivefold increase won’t.

In the end, this isn’t just a question of Wisconsin’s national pastime. It’s a question of Wisconsin jobs, and judging by the no-holds-barred financial incentives with which the state kept Mercury Marine afloat in Wisconsin, I don’t think the other end of State Street will be looking to tick off any other large employers anytime soon.

Assuming Berceau’s bill passes as is, even more problems will be created as soon as Hudson residents find out the tax is only half as expensive across the St. Croix. The same thing currently happens on the borders of Illinois and Iowa. Wisconsin’s new beer tax of around 32 cents a gallon will be way more than our neighbors’ taxes of 14, 19, and 18.5 cents respectively.

So while on the surface, the proposal has merit, the numbers don’t quite add up. Berceau could save herself a world of trouble by compromising now when she can, rather than later when she has to.

Joe Labuz ([email protected]) is a senior majoring in biomedical engineering.

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4 older comments

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Do you mean the whiskey rebellion? Shay’s didn’t have to do with liquor, particularly, just taxes.

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32 cents a gallon!?? The horror! Hey Joe, instead of focusing on a FIVE HUNDRED PERCENT TAX INCREASE, (OMIGOSH!), why not focus on the costs that the alcohol industry passes on to taxpayers in Wisconsin. The cost of courts, jails, hospitals, juvenile justice programs, addiction treatment for alcoholics…I could go on. This isn’t about some kid barfing on his shoes. The problems created by alcohol are much bigger than that. Add it up, and you’ll find that every single taxpayer in your state is on the hook for 500 to 1000 dollars, every year, to subsidize the beer companies’ profits. The proposed beer tax increase IS a taxpayers’ revolt. We’re tired of footing the bill…when you’re out of school, and paying taxes, you’ll understand. I drink a couple of beers after work some days, and a six pack on the weekend. Couple six-packe a week. Adds up to 78 gallons of beer per year. Are you sitting down? Ready for a shocker? (No, not that kind.) At 32 cents a gallon, that’s $24.96 a year…how will I ever afford that? I will quit drinking beer, the breweries will shut down, and Mercury Marine will go out of business. (That’s a non sequitur…just like when you threw that same reference into your rant.)
And let’s look at your headline for a minute. The beer companies will trot out a stat that proves beyond a shadow of a doubt that the last time anyone raised a beer tax, it cost SIX THOUSAND JOBS. Yet, the fact of the matter is that in the time period they specify, their industry actually ADDED more than twice that many jobs. Funny how their stats don’t match up. Hey, you’re a senior, you’re old enough to drink, and you enjoy a cold beer. But eight bucks per keg seems rough to you. In five years, when 20-50 percent of the state taxes that are withheld from YOUR paycheck go to subsidize the beer companies…you’ll see thing a little differently.

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JOe — You may want to check the new rate (as of Sept 1) for Illinois’ beer tax. While you’re at it, try calculating the WI tax rate, and the proposed rate, per 12-ounce drink or per sixpack. Then think about the 500 per cent again. If I have a nickel in my pocket and someone gives me a quarter to add to it, I will still be far from wealthy.

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First, I can’t get behind your phrase “whopping 32 cents” line. That’s one gumball dude. If it was a couple bucks per gallon, ok, then you have a legitimate economic argument. But 32 cents? Really?!

And maybe I am just too liberal for my own good, but could someone please PLEASE tell me how nickel extra on a bottle of beer is going to cost jobs? I dunno, maybe I am deluded into thinking people are going to grumble for the first year of the tax (while they are still buying beer at the same rate) and then forget about it. But who knows, perhaps Joe is right and the beer tax is going to spell disaster for WI jobs.

Perhaps he is right…but I lean more towards ARE YOU F*&KING KIDDING ME?

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