How about a 12,675% Tax Increase on Wine?

It's remarkable!!

An initiative that is currently gathering signatures for California's November ballot would, if approved by the voters, increase the tax on a bottle of wine by 12,675%


How could this possibly be justified? The initiative's sponsors, Josephine and Kent M. Whitney, provide the following reasoning:

(a) Alcohol-related problems cost Californians an estimated
$38.4 billion annually, including the costs of illness and injury, the
criminal justice system, lost productivity, impacts on the welfare
system, trauma and emergency care, and the foster care system.

(If we are going to increase taxes by 12,675% we better do better than "estimated")

(b) Alcohol use also costs California's state and county governments
approximately $8.3 billion annually in increased health care costs,
criminal justice costs, and lost tax revenues, while the income to the
state from alcohol licensing, fees, excise taxes, and sales taxes is
less than $1 billion annually.

(Are the benefits of alcohol sales and consumption to be tallied based only on tax revenue?)

(c) According to the u.S. Centers for Disease Control and Prevention,
beer is the most commonly consumed drink by binge drinkers, and 67
percent of binge drinkers are underage. Underage drinkers account for
17.5 percent of all beer consumed annually, spending $22 billion.

(Doesn't this mean we really out to be taxing binge drinkers and underage drinkers?)

(d) Beer accounts for 80 percent of the preferred alcoholic beverages.
(We wine folks need to step it up)

(e) Ninety-seven thousand college-age women are raped or sexually
assaulted each year under circumstances involving the use of alcohol.
Half of all rape victims were intoxicated and half of their attackers
were intoxicated at the time of the attack.

(How is a victim's and attacker's state of inebriation the fault of an inanimate object?)

(f) Alcohol use during pregnancy causes approximately 5,000 children to
be born in California each year with alcohol-related birth defects.

(How is a mother's abuse of alcohol the fault of an inanimate object?)

(g) The cost of services for one person born with fetal alcohol syndrome is over $2 million each year.

(Let's work on educating folks about abusing alcohol while pregnant)

(h) The use of alcohol is associated with an increased incidence of
digestive disease, cancer, neuropsychiatric conditions, cardiovascular
disease, malignant neoplasms, pregnancy-related conditions, fetal
alcohol syndrome, and high risk sex.

("Associated with"?)

(i) One person dies, and there are 533 incidents of violent crime, every hour due to alcohol use in California.

(Really, these crimes would never occur if alcohol were not consumed? Really?)

(j) While the staggering cost of alcohol abuse is borne by all
Californians, 67 percent of the alcohol sold in California is consumed
by only 11 percent of the population.

(While the staggering cost of war is born by all Americans, 100% of war is carrier out by only 1% of the population. Let's tax war.)

(k) The last alcoholic beverage tax increase in California was in 1992.
(Good point! What about a 5% increase?)

(l) An alcoholic beverage tax increase is necessary to mitigate the adverse effects of alcohol use.
(How do we first factor in the positive effects of alcohol—like needing it to appreciate this proposal?)

I don't mean to mock the effects of people's poor decisions where alcohol is concerned. But I do mean to mock those that would waste Californian's time and block my entrance to Safeway with the ludicrous proposal that we increase the tax on wine by 12,675%.

16 Responses

  1. El Jefe - March 30, 2010

    What should be of concern is that they will not be collecting signatures in front of your Safeway in wine country. Those signatures will be collected in parts of the state that are not tied so closely to beer and wine production, it will likely make the ballot. And what will (hopefully) kill it is $6.08 per six pack of beer, more than anything else.

  2. John Kelly - March 30, 2010

    Tom – the neo-prohibitionists backing this proposed initiative “estimate” the new tax would raise $8-$9 billion annually; immediately shot down. “But [Sec’y of State] Bowen’s office predicts that overall state and local alcohol tax revenues would shrink by hundreds of millions of dollars, as recession-bit consumers cut back on purchases.”
    I don’t know about you, but when some signature-gatherer approaches me outside the market to qualify this lunacy I’m likely to laugh in their face.

  3. Bean - March 30, 2010

    I am for REASONABLE tax increases but this is ridiculous. It is not sustainable and will result in substantial losses. This initiative is grounded in fear and ignorance, combine that with the masses and government and you have a mess.
    California is clearly in a budget crisis and someone needs to pay but sacrificing an iconic industry is not the way to go!

  4. Jason - March 30, 2010

    The negative consequences of alcohol consumption are well understood, and ther folks are taking the same tack as cigarette taxes. Unfortunately for them, there is far less recreational responsible cigarette usage than alcohol consumption. That said, such a tax would severely damage a major California industry and hurt the majority who consume alcohol in a responsible manner.
    As with all state initiatives, the appropriate way to pay for services is NOT consumption taxes but graduated income taxes. Anything else is unjust and ineffectual.

  5. Samantha Dugan - March 30, 2010

    When I first read this I thought surely it was a joke, I mean who in the hell that lives in this state could possibly see this as a good idea….sadly, damn thing was true. Unreal and this struggling retailer will sign that form presented to her in front of the Safeway with my aka, Ms Blow Me….

  6. Dave Erickson - March 30, 2010

    “Sin” tax, the last refuge of scoundrels.

  7. Nancy - March 30, 2010

    The powers that be could always just forget the whole initiative thing and “deem” it passed. I gather the state needs money?

  8. EaglesNestWine - March 31, 2010

    A 12,675% tax increase on wine is incredible and will ultimately cause this ballot initiative to fail (if it gets that far).
    Wine (and other alcohols) in moderation have proven to be healthful in study after study (wine is particularly beneficial) – thus to demonize wine in this manner is irrational.

  9. CACABLOVER - March 31, 2010

    I for one would shop the rest of the wine world.

  10. Charlie Olken - March 31, 2010

    I have not really paid attention to taxes on wine because they amount to a pittance at my price level. But, could you discuss how much they are at the State level and whether those taxes collected are directed to specific targets or go into the general fund. Finally, can you comment on the level of CA taxes on various alcoholic products relative to what is charged in other states and other countries.
    It is my impression that alcohol consumption around the world does not track very well with tax rates, thus pretty much undercutting the abstinence aspect.
    As you say, there may be some justification for an increase in rates, and I would bet there is even more justification for a rethinking of how the rates are set in the first place. I believe it is a Fed issue only, not a State issue (I guess I could be wrong about that) but taxing table wine under 14% at one rate and table wine at 14.1 and above at another has always struck me as silly. There are probably similar sillinesses in the way the State taxes alcohol.

  11. JohnLopresti - March 31, 2010

    I think a revision of the winetax structure ought to help those wineries who have demonstrated resolve to provide excellent quality wines at a price that is affordable. Let the highly additive augmented, labeling regulations parsing, creature identified brands pay proportionally more for producing synthetical chemically “enhanced” products containing more artificial substances that augment health risks. If wineries try to produce a beverage that is as close as possible to natural balance, their taxes should be less, as their products are more healthy. Adding 1 dollar in tax to fine wines at pricepoints centered at thirty dollars and above, should be of little impact to consumers in that rarified spectrum of the marketplace.
    I would apply the same sliding scale tax structure to beers. Highly chemically augmented mass produced beers shipped to retail outlets a half continent distant at high carbon footprint cost, should receive the brunt of any tax increase. Locally produced craft beers should receive favorable tax treatment.
    However, the CA budget hassles are a product of mostly regimented polarization of the two political parties, chiefly Republicans. CA also has a legislative requirement that budgets pass by supermajority vote, meaning a partyline vote halts passing any budget, giving the minority Republicans leverage to induce great suffering at the time of delayed passage of each budget in CA. CA needs to lower the budget majority votes required to a simple majority instead of the current 67%.
    I doubt that even among Republicans there would be a plurality of voters favoring a measure which would impact the wine industry by reducing sales from exorbitant large new taxes.
    The 12,000% tax measure may qualify for the ballot, but will not pass. Though, if the measure were to be structured as I suggest above, it would be less disingenuous, and it would improve some individuals’ exposure to risks related to health.

  12. 1WineDude - March 31, 2010

    Interestingly, this would NEVER fly in the business world.
    For example, if you’re going to ask someone (in this case taxpayers) to fork over a 12K% increase, then you’d better have a compelling business case of future cost avoidance & savings. So, they need to either 1) demonstrate that the investment is returned in some other way (lower healthcare costs, maybe?), or 2) hope that the voters are really, really stupid, misinformed, or both.

  13. John Cesano - March 31, 2010

    I woke up, saw a link to a new story provided by Pithy Little Wine Co, and wrote my own version of this article. I see many people have written their version.
    For less than the cost of buying a house, Josie & Kent whitney can get the initiative qualified for the November ballot by using paid signature gatherers, many of whom lie about the ballot measure in order to get their signatures…and money.
    With the financial support of the larger alcohol industry who do not want beer prices raised a dollar per bottle, or spirits increase $17 per bottle, there will be a vigorous resistance organized against this measure. Wine writers, print and electric, will be the white knights, educating the public and casting this as an assault against wine, food, friends, family, and culture.
    The State’s impartial fiscal analysis forecasts a loss of hundreds of millions of dollars if this initiative were to become law, due to drastically reduced sales of alcohol.
    John Cesano

  14. Julie Brosterman - April 1, 2010

    Keep reading…
    The proposed bill also goes on to say that there would be an $85 a gallon tax on spirits.
    Time to start drinking.

  15. Richard - April 1, 2010

    Curious if you know any more about the people sponsoring this? the Whitneys? and what their motivation may be?
    As a small so called “boutique” winemaker, suspect this would put me out of business unless I could really improve out of California sales. Don’t mean to sound like a fear monger because nobody knows what would happen, but when my wine retails for an average of $40 a bottle, tacking another $10 on will not help…
    And, while I would like to think such an initiative would not pass if ever on the ballot – just look at the problems in California now – most of the reason the State has problems is because of various initiative having been passed – the 2/3rds majority law; anti-taxation laws. Californians pass these initiatives because they want to have their cake and eat it too. They are basically “libertarian socialists” who want all their freedoms, want everyone else to have their freedoms, want the state to pay for them, but don’t want any taxes to help pay for them…
    So, don’t be surprised if this thing gets on the ballot and passes… I’m just saying – it’s California!

  16. John Cesano - April 4, 2010

    I’ll take a shot at answering your question since I wrote an article about Josie B. and Kent M. Whitney.
    Josie B. Whitney, 66, is a self described real estate business owner.
    Kent M. Whitney, 69, is a self described former Master Chief Petty Officer, and the owner of 21st Century Wellness Initiative. He also appends PTL (Praise The Lord) to some of his correspondence.
    This regressive neo-prohibitionist sin tax was authored by the Whitneys, a San Diego couple.
    The initiative directs where revenues collected go, and it is possible that the Whitneys hope to cash in through their Wellness venture.

Leave a Reply