I Need Some Reassurance, Ms. Berceau

Rep. Terese Berceau reprimands The Cap Times today for its editorial inveighing against her proposed beer excise tax. She begins by saying: "I write in response to your ill-informed and poorly reasoned editorial against raising the beer tax a modest 2.4 cents per 12-ounce can or bottle."

When Berceau goes around saying the tax is going to amount to only 2.4 cents per bottle, the implication is that the consumer will see the price at the store go up by that amount. But this is not the case. It is true that the tax increase would be 2.4 cents per bottle, but this is levied at the brewery which means that the consumer will be paying more than that. Rob Larson of Tyranena explained recently:

These individuals are advocating raising the excise tax for beer from $2.00 a barrel to $10.00 a barrel to fund various alcohol abuse and law enforcement programs. They claim this tax increase will only add 2.4 cents to the cost of a bottle of beer... Of course, excise taxes are taxes paid by the brewery and passed along through the distribution chain. This would require us to charge $0.56 more per case... but since we price everything if $0.50 cent increments... it will ultimately be passed along to our wholesalers as a $1.00 increase (after all, we don't want to eat these increased costs). And, of course, our wholesalers and retailers will then pass along the increased costs along with their margins. So, our $1.00 per case increase will really show up to you, the consumer, as a $2.00 per case increase... or the $0.50 a six pack I previously mentioned. And then add another $0.03 for the additional sales tax!

Berceau further chastised The Cap Times for how it characterized her proposal: "…the paper attributed the initiative to raise the tax to the state budget deficit when my bill has been out for two terms prior to this session, and the money has always been slotted for a segregated fund to address law enforcement and programs for alcohol and other drug abuse".

I've written about this previously so let me reiterate quickly by saying that, with a poor past record of dealing with tobacco settlement money and a $6.5 billion state budget deficit looming, I personally see the odds of that money being spent on addressing "law enforcement and programs for alcohol and other drug abuse" to be quite small. And what is to stop the state from raiding that fund? Burceau notes that "wine and distilled spirits are already taxed at a median rate with other states". So where do those taxes go? To a segregated fund?

Fred Risser said that the state will raise the beer tax within his lifetime and I believe him. So, when this happens, let's keep track of where the money goes. I want to find out just how much of it ends up in the segregated fund. Berceau says: "It is to use the taxing power of the state to deter behavior which damages society, and to help pay for programs that address the problems caused by that behavior." So how about an amendment to the bill which states that the tax ends the nanosecond that one red cent of that money is redirected from the proper fund or is spent on something other than its intended use?