Punch-drunk government

Imagine this: you own a small but successful business in Oregon. Because of a law regarding the product you make, you pay $19,000 in taxes—not on your profit, but on your product. But this year, your taxes could increase to $370,000. Goodbye profit.

Imagine this: you own a small but successful business in Oregon. Because of a law regarding the product you make, you pay $19,000 in taxes—not on your profit, but on your product. But this year, your taxes could increase to $370,000. Goodbye profit.

This is what a few Oregon legislators propose to do through raising the beer tax. The dollar figures above are what Eugene craft brewery Ninkasi would pay in additional taxes.

These proposed increased beer taxes would harm breweries, wouldn’t solve any problems, and hide the fact that only 5 percent of all alcohol taxes are directed into programs for drugs and alcohol. [“Beer tax brewing” Daily Emerald, Feb. 17.]

Certainly, all sane people agree alcoholism and drug addiction are serious societal ills. And it’s hard to argue that we don’t all pay for their negative effects in some form.

Proponents of the increase, like The Oregonian’s Steve Duin, cite compelling costs.

“ECONorthwest estimated the economic costs of substance abuse in 2006 as follows: $813 million in health care costs; $967 million in consumption-related crimes, social programs and enforcement laws; and $4.15 billion in lost earnings of the abusers and their victims,” [“One more round with the beer tax,” Feb. 22].

He goes on to say increased revenue would be $320 million per biennium via the beer tax. So it won’t even make up in two years what we supposedly lose in one year! Why not raise the tax to cover the nearly $6 billion lost?  That’d be a little too Keynesian, right?

Right. And the real reason none of us are willing to raise the beer tax to such a rate is the same reason raising the beer tax much at all is useless: It’s only one finger in a dam with a gaping hole. Alcoholism and substance abuse are deeper problems than government spending can fix.

Not that they can’t help. Surely treatment has some effect. But the government did not start Alcoholics Anonymous, and the government can’t address the deeper cultural issues—values, family life, peer pressure.

Oregon’s youth might have a high drinking rate, as the bill cites, but increased taxes won’t have the same effect things like education, positive relationships and religion can have. I’d have hated Prohibition personally, but it was a religious Temperance movement and its sympathizers were the ones who influenced government, not the other way around.

Some government spending via a beer tax is appropriate. Surely we all agree that everybody shouldn’t have to pay for the consequences of alcohol abuse, yet know we do right now, though the price of our own health care and taxes going to treatment.

So why not simply get rid of those taxes altogether, and place the entire burden on the abusers and drunk drivers? In principal this is the right thing to do. But to do so requires the expensive legal and prison system that (surprise) we pay for anyway!

And when abusers can’t cover the cost of the abuses by themselves—that’s it. They just serve time. No one ever gets reimbursed for the full cost of the crime. 

For now, let’s at least try using the whole tax for drug and alcohol programs, not just 5 percent—and then let’s see if the spending really helps recoup the costs. But raising the tax by the roughly 1,900 percent that legislators want would only discourage more business.

Increasing the beer tax to solve Oregon’s societal problems betrays the fundamental faith Democrats in Oregon’s legislature have in the power of government to wield moral influence. Meanwhile, the rest of us know taxes don’t discourage alcoholism—at best they can only help pay for some of its clean up.

Perhaps worst of all is that it is the manufacturers who are directly taxed—not the consumers, who are ultimately responsible for alcohol’s ills.

By taxing manufacturers directly, all beer is affected—not just beer sold in stores i.e. the cheapest beer associated with alcoholism. So people dining, or in bars, where pints are more costly already have to pay more.

So let me propose a tax increase, only paid by consumers, and only in stores. We can even double the current tax per 12-ounce bottle—so you’ll pay 2 cents per bottle. Use this money, but don’t hurt brewpubs, restaurants, bars and successful breweries by trying to fix problems the government can’t solve anyways.

American’s actually used to drink much more (13.5 liters per year average). One could say the way we drank was “revolutionary,” as the Molasses Act of 1733 threatened rum production and was part of the road to American independence.

Everybody drank, even Puritans. You didn’t get treatment if you were a drunk. Your life fell apart and you either died or figured out how to get it back together. It took religious revivals to really discourage drunkenness.

But today the religion is government—and they can only give a slap on the wrist, not send you to hell. I can be a drunk and the government will bail me out? Not much of a discouragement.

So I promise to do my part to discourage substance abuse by personally calling you a fool if you abuse alcohol and drugs. And I promise to point you to real solutions like A.A. and your Higher Power, even if it’s your own will. I won’t wait around for government intervention.