Is Sprecher Brewing Company, along with members of the Wisconsin brewing industry, the Wisconsin Grocers Association, the Tavern League – which represents 5,000 bars and liquor stores – right to oppose the current beer tax increase propsal now in the legislature?
Wisconsin will have a $6.6 billion budget shortfall this year so to some in the legislature it makes sense that they raise taxes and cut services wherever possible, even though people are losing jobs, businesses and homes. Theoretically, increased tax revenue along with cuts in public spending will result in a decreased budget shortfall and all will be well. But generating operating revenue by increasing taxes at a time when people’s incomes are diminishing seems chimerical, a reactive grasping at straws more than anything. Be that as it may, doing something is far better than doing nothing. Best if it’s the right something.
Rep. Terese Berceau and Sen. Fred Risser, both Madison Democrats, proposed a beer tax increase from $2 to $10 per barrel to help fight drunken driving and treat alcohol addiction and mental illness. The beer tax has not been raised since 1969 and is currently the 3rd lowest in the nation. According to a May 15 article in Milwaukee Journal Sentinel, “Berceau said her plan would raise tax on a 6-pack from 3.6 cents to 18 cents. Overall, it would cost beer drinkers $40 million to $48 million.” Sounds like a lot of money for worthwhile programs, but one must question whether Rep. Berceau’s estimate of the cost to the consumer is accurate.
In other words, if the barrel tax begins at the breweries, the multiplier effect will kick in and an additional fee will be added at each stop along the way (distributor, retailer) so the final cost to the consumer ends up being significantly higher. Potentially, this means more tax revenue and more funds for worthwhile programs all things being equal. But all things are not equal at present. We’ve gone from an economy where a significant majority of the population felt flush to one where a significant majority is counting every dollar and saving rather than spending. The net effect is less consumers and higher unemployment, evidenced by the recent waves of layoffs as well as stores, restaurants and bars closing due to lack of business.
Personally, I question whether now is the right time to raise the beer tax. What do you think?