Ben Cannon's Brutal Beer Tax Increase

Don't mess with successTimes are tough in Oregon, and all of us - including beer lovers - have to swallow hard and bear our share of the pain. But a proposal to raise the state tax on a barrel of beer by almost 1,700% is asking beer drinkers and the state's craft brewing industry to swallow way too much.

Oregon's state tax on beer currently is a mere $2.60 a barrel, one of the lowest in the country. Raising it by a moderate amount - even to about $8 a barrel, the national mean - would be completely justifiable in this fiscal emergency.

But legislation being pushed by Rep. Ben Cannon of Portland and several other Democratic lawmakers would go way beyond that. Their measure, House Bill 2461, would slap on a walloping tax of nearly $50 a barrel. The money would go to alcohol and drug abuse prevention and treatment.

How would such an extreme tax increase affect consumers? Advocates say it would raise the price of beer by only a little more than a penny an ounce - roughly 15 cents for a 12-ounce beer. But opponents say that figure is deceptive. "The lie of the 15 cents is that a pint [actually] goes from $4 to $5.50," Kurt Widmer of Widmer Brothers Brewing told The Oregonian.

Or, as blogger and beer aficionado Jeff Alworth more colorfully put it: "The per-beer increase backers of the bill constantly cite is actually a wild-ass guesstimate about the downstream costs to the public, not actual data."

Many consumers might be willing and able to shell out another 50 cents a pint to enjoy their favorite brews, although we have to think there would be a small but noticeable impact on sales at pubs and restaurants as well as grocery outlets.

More worrisome is the likely effect on the state's important and rapidly growing craft brewing industry, which employs thousands of Oregonians, many of them at higher wages than the state average. Kurt Widmer again: "To me it's a mystery why you would damage an industry that's proven to create family wage jobs."

For brewing giants like Anheuser Busch and Coors, the added tax would be little more than a fleabite. For smaller craft brewers, such as Cascade Lakes Brewing and maybe even the Deschutes Brewery, it would be a serious sting - especially coming on top of recent price increases forced by higher costs for ingredients like barley and hops.

So why do Cannon and his colleagues want to saddle the industry with a crippling tax increase? Alworth thinks they're just anti-alcohol: "The one thing left to conclude is that this is some kind of moral stand against beer, an intentional effort to damage the industry.  Sinners taxed to reduce the sin, not its cost."

That might be taking cynicism a bit too far. But whatever the motive, Cannon's brutal beer tax increase is a bad idea for Oregon. We're giving it THE BOOT, and we hope the Legislature will do the same when it takes up the measure later this month.