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Oregon 1,900% Beer Tax Increase: 1¢ a Glass Sin Tax Jumps to 15¢

by Tina Kells | February 16, 2009 at 09:38 am

1825 views | 6 Recommendations | 6 comments

The state of Oregon is planning a monster sin tax increase of 1,900% per barrel of beer and people are outraged. The tax increase, which will be used to fund alcohol addiction awareness programs, amounts to only 15 cents per 12-ounce glass but opponents say that amount will cripple the micro-brewing industry and cost the state jobs.

The beer tax in Oregon is among the lowest in the country at less than a penny a glass. Lawmakers in the state say that the time has come to bump that up to the national average. Beer taxes in Oregon haven't been raised in over 30 years, since the late 1970's due to aggressive lobbying by powerful beer industry representatives.

Two-term Rep. Ben Cannon, D-Portland, is the chief sponsor in the House of a bill that would raise the tax on a 12-ounce beer to 15 cents for drug and alcohol abuse prevention and treatment.
He says he's willing to talk about the size of the tax and how it should be used. And he's open to discussing whether legislators should risk even more heartache by going after the tax on wine.

Despite the fact that a tax increase on beer is long overdue people in the state of Oregon are not buying the argument that they are under taxed for their sins. As one of the "anti-cigarette states" Oregon already has hefty taxes on tobacco products. And the fact that the increased tax is only impacting beer and not all alcohol is raising a few eyebrows.

"Fifteen cents doesn't sound like a lot, but the general principle of it, I don't like it," says Amy Kliewer, lunching with a friend at Widmer's Gasthaus Pub in North Portland.

The 24-year-old public relations specialist lost her job just before Christmas; every penny she spends on fun counts.

"It's beer!" Kliewer says. "If you start with beer, what's next?"

In a depressed economy state opponents are questioning the wisdom of raising any taxes, even so-called "sin taxes," and caution the Oregon state government that job losses could follow any increase. Meanwhile the per barrel tax increase from $2.60 to $50 will raise the price of beer at the pub more than the quoted 15 cents; expect the price of a pint to jump from $4.50 to $5.00.

Oregon's market-small but vocal craft beer makers oppose the bill, arguing that increasing the $2.60 tax on a barrel of beer to nearly $50 would crimp the industry and result in layoffs.

Kurt Widmer, one of the brothers behind Widmer Brothers Brewing, says the actual tax paid by drinkers will be much higher than legislators claim, after middlemen slice their share.

"The lie of the 15 cents is that a pint (actually) goes from $4 to $5.50," he says.

"To me it's a mystery why you would damage an industry that's proven to create family wage jobs."

For more about taxation in the United States see NowPublic coverage Where Do Our Tax Dollars Go?

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Pythiian1

at 10:56 on February 16th, 2009

Thanks Tina for the referral. I'm providing a glimpse of Oregon's list of tax dollars recipients in FY 2008

Roy C

at 11:39 on February 16th, 2009

During Prohibition, the price of alcohol quintupled, and with that 5-fold increase, alcohol was still available, if illegal, but per capita consumption went down and so did auto accidents, malformations in infants, delirium tremens (alcohol psychosis) and a host of other problems.

Even today, when the price of beer goes up, the gonorrhea rate for teens goes down.

So, I say let the taxes go up.

Super Awesome Guy (not verified)

at 14:51 on February 16th, 2009

This is really killing me. I wrote about this tax over on my blog: http://superawesomeguy.com/2009/02/not-awesome-beer-tax/

Be sure to contact this Ben Cannon guy: ben@votebencannon.com

Jordan Yerman

at 06:20 on February 17th, 2009

This seems to saddle one of Oregon's (few) thriving local industries with an ill-timed expense.

RhineChesshire (not verified)

at 20:11 on February 24th, 2009

It seems that the end result affect of this is less overall revenue. Anyone who is outraged by this motive to tax beer will divert into buying out of state,homebrewing or not buying beer all together. people dont stop drinking unless they want to, its a given that the price will do nothing but make those who chose to drink more econmicallly weak. thearfore in turn, spending even less money on goods and services other than alcohol.this will result in less tax revenue the state could make. How can a tax increase change the personal irresponsiblitty of people who drink while pregnant? teenagers and gonerea? give me a brake. some things will never change due to ignorance. thats where education and personal will come from, not legislative action against local industry. taking revenue,employment, livelhood and overal moral from the general populace is no answer to anything but christian bullshit. tax my "sins" and you will have no more tax, just more unprofitable "sins"

eastvanray

at 14:54 on March 9th, 2009

Price goes up, demand goes down (unless the demand is perfectly inelastic - which demand for beer is not). With many people experiencing decreasing income something has to give and what amounts to 11% price increase, demand WILL fall. Some beer drinkers will switch to other alcoholic beverages and some will drink less but I think it is unfair to single out consumers and producers of beer only.