Clown Cars Appear at Oregon Capitol—2,700% increase in Alcohol Tax Emerges
Proposing to raise the tax on beer and cider by 2,700% and raising it on wine by 1,500% (YES…between 2,700% and 1,500%!) is in and of itself comical. But it’s not a comically bad miscalculation by the sponsors of an Oregon bill that would do just this. It is the political equivalent of virtue signaling: Attempting to get credit for taking a strong position on, and making a bold proposal to address, an issue when there is little to no downside when it inevitably fails.
Oregon State Representatives Tawna Sanchez and Rachel Prusak are the chief sponsors of House Bill 3296. If passed, the bill would increase the excise taxes on beer and cider in Oregon from $2.60 per barrel (31 gallons) to $72.60 per barrel. The increase in the wine excise tax in Oregon would go from $0.65 per gallon to $10.65 per gallon. Moreover, the tax would increase each year based on the change in the consumer price index.
Representatives Prusak and Sanchez are concerned about addiction in Oregon and want more money for funding recovery efforts by the state. They and others were looking forward to suggesting a tax increase before last November’s election. However, their plans to use alcohol taxes to raise funds for recovery efforts were undercut by a ballot initiative that would dedicate any additional tax revenue from cannabis to be dedicated toward recovery programs. By some estimates, that ballot measure that passed in November will add $54 million to Oregon’s addiction and recovery programs.
So what are these two representatives doing introducing such an absurd bill that increases taxes on beer, wine and cider in such a comically monumental way? Why are they doing this now when they must know the possibility of it passing is close to zero? The bill will be opposed by the entire Oregon alcohol industry, by the national alcohol industry, by the vast majority of state politicians, and by the vast majority of consumers.
Virtue signaling. Prusak and Sanchez want to show their supporters in the prevention and recovery world that they are willing to take on what they must surely refer to as “big alcohol”. But are they really taking on anyone? All they have to do is go to a committee hearing, make their speech about how alcohol will survive just fine under this kind of tax increase and that it’s the moral thing to do. Then, they wait as the bill is voted down in committee. Finally, they go back to their supporters in the Oregon prevention and recovery community and say, “look at us…aren’t we wonderful? Aren’t we fighting the good fight!”
But I want to focus your attention on what these two Oregon lawmakers and their supporters are proposing.
Based on the $0.65 per gallon Oregon excise tax, a winery paying excise tax on 5,000 cases of wine will pay $7,700 to the state in excise taxes annually. The supporters of the excise tax increase tell us that it will result in a mere $0.40 additional per glass of wine. That doesn’t sound too bad, right? But another way of putting that is the winery, instead of paying $7,700 per year to the state, will pay $126,000 per year under the new rate. An extra $120,000 out of the winery’s pocket. Do you see what I mean when I call this proposed tax increase comical?
But what about the Oregon brewer? Today, under the $2.60 per barrel excise tax, a brewer paying on 2,000 barrels of wine would remit $5,200 to the state. Under the proposed excise beer tax that same brewer would owe the state $145,200. This isn’t simply comical, it’s straight-up irrational and indefensible.
Beyond the undignified virtue signaling going on here with Representatives Sanchez and Prusak and their bill, there is also an element of them both being so completely out of touch with the world of business and industry that they somehow feel comfortable suggesting that a tiny, 5,000 case Oregon Pinot Noir producer can easily pony up an extra $100,000 in excise taxes. Do they not care about the fate of the owners? Do they not care about the jobs that will most certainly have to be cut by the winery? Do they not care about the kind of pain their clown car of a proposal will generate?
It appears not.
If you are an Oregonian (like me) and want to express your displeasure with House Bill 3296 and its sponsors’ comedy of errors misunderstood as policymaking, consider the following:
EMAIL BILL SPONSOR REP. TAWNA SANCHEZ: [email protected]
EMAIL BILL SPONSOR REP. RACHEL PRUSAK: [email protected]