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Op-Ed: Beer Tax Increase in Cali

Submitted by on May 18, 2009 – 10:06 AMNo Comment
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The California state legislature is home to some of the most incompetent and partisan lawmakers in the country. Now that they’ve mismanaged one the world’s largest economies into a deficit over $20 billion deep, what do they do to rectify it? Cut their salaries and business expenditures? Make the government run more efficiently? Of course not. First, they cut hundreds of millions from an already under-funded CSU system. But coming in at a close second is punishing drinkers for the legislators’ own buffoonery. Thus, Gov. Schwarzenegger suggested, and Assembly member Jim Beall consequently introduced, a new bill that would add a ten cent tax to each and every drink one orders; every single beer, every shot of liquor and every glass of wine.

Beall claims alcohol-related incidents, such as car accidents, cost the state $38 billion annually. It is this figure that is most commonly paraded in the media and to the citizens of the state in order to justify the tax increase. “The state of California picks up the bill – you and me,” Beall said. “It’s time for the alcohol industry to face their responsibilities and pay their fair share toward making California a healthier and safer place to live.”

Leaving aside, for the moment, the fact that Beall and his colleagues aren’t taxing the industry but rather actual consumers, there is evidence that the $38 billion figure is misleading if not inaccurate. Edward Stringham of the libertarian Reason Foundation states, “drinkers earn 10 percent to 14 percent more money than nondrinkers. Men who drink socially, visiting a bar at least once a month, bring home an additional 7 percent in pay.” Stringham also cites “a 2005 study sponsored by the National Institute for Alcoholism and Alcohol Abuse [which] similarly found that drinking actually increased the returns to both education and work experience.”

Regardless of which figures are more representative of the current relationship between the economy and drinking, there is one indisputable fact. As reported by the Associated Press, Republicans and Democrats have agreed that “no tax increases were [to be] considered for businesses. Instead, the [state] budget deal contains a long list of corporate tax breaks and credits” that will save the richest corporations in the state over $1 billion while “cost[ing] California’s treasury at least $2.5 billion over a five-year period.”

But by all means, add ten cents to everyone’s drink. By all means, add additional taxes to the citizens of California, over one million of who are out of work and already facing a new car tax and increase in sales tax. By all means, keep up the fine work.