It is interesting to follow beer fans in different jurisdictions in the US and the UK react to various plans to use beer as one way to cope with the global economic crisis. The British Beer and Pub Association backed by CAMRA and many brewers is running the Axe the Beer Tax campaign. States like Illinois are thinking about making changes while others like Wisconsin may leave them where they have been for forty years. Jay points out that the US Federal tax might be tripled from 18 to 45 bucks a barrel but is that really stupid or just reality in an economic collapse? Just as it makes no sense when a certain sort of politician advocates for lower tax on business income to get small businesses started – no sense because they have no profits to call income at that stage – similarly, in a downturn, you can’t raise taxes on the limp sectors of the economy economic activity. So, if there are going to be taxes – and, yes, there are going to be taxes – why should beer be exempt?
Amy Mittleman in Brewing Battles points out that modern taxation policy was largely created in the mid-1860s to react to the nation’s financial need to pay for the Civil War. Beer and brewing was the chosen conduit for the taxation as was follow existing European models with the aim of creating the greatest level of consumption and therefore the greatest revenue stream. She also points out that the Federal beer excise tax on beer was set at 9 dollars a barrel almost six decades ago under the Truman administration. The tax level now in after inflation dollars has simply not kept up given $100 in 1952 is now worth $798.87. Fully adjusted taxes would make for about $72 per barrel of Federal excise today at Truman’s rates. Obama’s Senate pals are considering $45. Jay quotes Jeff Becker of the Beer Institute as part of his argument:
In 2008, members of the beer industry paid more than $41 billion in taxes at all levels of government and provided jobs to 1.9 million Americans. Any proposed tax increase would severely offset this important economic contribution.’”
Really? Any tax will threaten it? Will “wipe out an industry”? Seems like the socialists do pretty well on the beer consumption scale. Look at it this way. In these tough economic times there are two western economies which are sort of standing out. Norway is booming and the Obama administration is looking to dull old Canada for banking regulatory lessons. Despite cursing it as we do, both Norway and Canada beer fans live in cultures with a pay-as-you-go mentality with high beer taxation. When I was a kid in Nova Scotia the beer cases even had “includes health tax” written on them right next to “union made” right on top. We paid the tax and were quite happy when the ER visit didn’t turn into a question about could we afford it. We also had no choice. Unlike today in the UK, there was no cheap booze alternative undermining the marketplace in the Maritimes. Well, except in PEI… but that is another matter.
Look, I am not going to say “oh, goodie goodie goodie, a new tax” but at the end of the day isn’t there an effort going on to somehow roll back the clock to about 1857 when shock and dismay is expressed over taxes on beer even in a time of economic recession?
