Multiple States Debating Beer Tax Increases Over Public Health Concerns

Austin Ray

THE GIST
In a number of states, politicians and advocacy groups are working to raise alcohol tax rates, with at least one such campaign focusing specifically on beer. These movements have been met, by and large, with opposition from industry stakeholders. Nevertheless, tax increases—particularly in the name of public health—represent another thorn in the side of brewers.
 
WHY IT MATTERS
We’re not ready yet to sound the alarm on the issue of taxation, per se. But for now, it’s something to keep a watchful eye on. Consider:
 
Earlier this month in Michigan, Republican State Rep. Tom Hooker proposed a 244% tax increase on beer. Per MLive: “It’s currently $6.30 per barrel, or about 1.9 cents per 12-ounce can. House Bill 5873 would raise the tax to $21.70 per barrel, or 6.5 cents per can.” 

The additional money pulled in by the state here would be split between state drug and alcohol recovery programs, as well as police departments. This is the story picking up most traction, but it’s hardly the only one.
 
Brewers in New Mexico are fighting a proposed increase on the excise tax rate they already pay on every barrel of beer they produce. That additional cost, brewers warn, would be passed on down to the customer. There, it’s the advocacy group Alcohol Taxes Save Lives & Money pushing for an increase. Meanwhile, Boston city councilors recently filed a petition to implement a “special 2% tax” on all alcohol sold in the city, also in the name of public health.
 
These types of increases likely have a steep hill to climb, as brewers and distributors have been decrying the proposed changes, particularly in Michigan and New Mexico. Now, I’m no accountant, so I’m not prepared to deliver a spiel about burdensome taxation. And besides, each tax initiative cited here—Michigan, New Mexico, and Massachusetts (as well any other out there that went unmentioned)—looks different case by case.
 
But on this, we will sound the alarm: the real commonality between each effort is a foundational fear of alcohol itself. Yes, any member of this industry carries a heavy burden of responsibility to help fight the monster known as addiction. But ruling by fear is never good, and the stigma surrounding alcohol still exists, if in a diminished capacity from its glory days during Prohibition.
 
Take it from State Rep. Hooker in Michigan, who actually said this: “If you’re going to use it, the problems that you cause are going to be paid for, and the same with producers… They’re producing a poison that’s causing problems to our systems, to our society, and they should have to pay for it.”
 
Uh, yeah, about that…
 
—Dave Eisenberg
 
READ MORE
Michigan beer tax hike bill lands with sobering thud [Detroit News]
Brewers: Proposed alcohol tax hike ‘absolutely absurd’ [Albuquerque Journal]
Councilors reintroduce alcohol tax proposal [Boston Globe]