NCPA - National Center for Policy Analysis


April 15, 2009

Today is the dreaded April 15 tax filing deadline, but at least in Oregon it's going to cost you more to drown in your tax sorrows, says the Wall Street Journal.  In their sober unwisdom, the state's pols plan to raise taxes by 1,900 percent on . . . beer.  The tax would catapult to $52.21 from $2.60 a barrel. The money is intended to reduce Oregon's $3 billion budget deficit and, ostensibly, to pay for drug treatment.

  • If it passes, Oregon will become the most taxing state for suds, one-third higher than the next highest beer tax state, Alaska.
  • The state may do this even though Oregon is the second largest microbrewery producer in the United States.
  • The beer industry and its 96 breweries contribute 5,000 jobs and $2.25 billion to state gross domestic product (GDP).

Kurt Widmer of Widmer Brewing Co. says the tax would "devastate our company and small breweries throughout the state."  Adds Joe Henchman, director of state projects at the Tax Foundation, "This microbrewery industry has gravitated to Oregon in part due to low beer taxes."

For Oregon to enact punitive taxes on its homegrown beer industry makes as much sense as Idaho slapping an excise tax on potatoes or for New York to tax stock trading.  Even without the tax increase, taxes are the single most expensive ingredient in a glass of beer, according to the Oregon Brewers Guild.

But Democrats who run the legislature are desperate for the revenues to help pay for Oregon's 27.9 percent increase in the general fund budget last year.  If they have their way, every time a worker steps up to the bar and orders a cold one, his tab will rise by an extra $1.25 to $1.50 a pint.  Half of these taxes will be paid by Oregonians with an income below $45,000 a year, notes the Journal.

Source: Editorial, "This Tax Is for You: A levy on Joe Six Pack," Wall Street Journal, April 15, 2009.

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