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Friday, June 14, 2024

Beer tax not appropriate in economic downturn

For many University of Wisconsin students is a bit of a reprieve—at least, for our livers. After just finishing up another Mifflin Street Block Party, many students will of course be celebrating the Mexican army's 1862 defeat of French forces in the Battle of Puebla tomorrow (or Cinco de Mayo, in case your history is a bit rusty). Either way, an integral part of both celebrations is most typically alcohol, which of course includes beer. 

 

Unfortunately, it seems like politicians in Madison are once again pushing for an increase in the state's beer tax. Governor Doyle is, thus far, against any such measure, though Rep. Terese Berceau (D-Madison), the driving force behind the bill, has been slowly mustering forces backing the beer tax hike. Although the increase would be very slight-—it would actually amount to little more than an additional 2.5 cents for a 12 oz. bottle—it could actually be quite detrimental to Wisconsin's economy. 

 

While it does not seem like a big deal, a low beer tax actually helps Wisconsin's economy. Currently, Wisconsin has one of the lowest beer taxes in the nation at six cents per gallon—or $2 for a barrel of beer. The only two states that have such a low tax are Missouri (which also pays six cents a gallon) and Wyoming (which stands at only two cents for a gallon of beer). Now, how does this help Wisconsin? Breweries—which have to pay taxes in not only the state where they brew the beer, but also the state where they sell the beer—benefit much more if they brew their beer in states with low beer taxes. Thus, they are able to pass along the savings to consumers and price their beverages more competitively. It comes as no surprise then that Anheuser Busch, one of the largest breweries in the nation, is headquartered in Missouri, the state with one of the lowest beer taxes. Likewise, the Miller Brewing Company is centered here in Wisconsin in part thanks to our low beer tax. 

 

An increase in the beer tax will have negative repercussions on the Wisconsin economy, as it discourages not only major breweries like Miller—which can also turn to increasing production at breweries in other states, and cutting back in Milwaukee—but also smaller breweries too. This in turn negatively impacts bars and taverns, which must in turn increase their prices. Taxing a major industry in Wisconsin will not provide any benefit to the economy, especially when considering the current recession. Thus, lawmakers really need to ask themselves if Wisconsin really needs this tax right now.  

 

Berceau has also been sending mixed signals when it comes to the tax. On one hand she says that the increase is so slight that ""if you drink a six pack a day, at the end of the week, you will have paid an additional dollar in taxes."" Fair enough, but then she goes on saying that with the higher cost of beer, hopefully teenagers will have a harder time purchasing alcohol.  

 

Really? A two and a half cent increase per bottle of beer will give teens a harder time purchasing it? Berceau is simply trying to appeal to whomever she can to push this poor idea through. Although the tax may help to fund programs to reduce alcoholism and drunk driving, stricter laws can do the same without hefty price tags. For example, having the third drunken driving offence count as a felony instead of the fifth would doubtlessly have a positive impact on drunken driving. 

 

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In short, an increased beer tax can do little but further injure an already crippled Wisconsin economy. In a time of economic recession, should any new taxes be introduced, especially one that targets one of the largest industries in the state? It simply does not make sense. However, if the money does actually go toward programs aimed at reducing alcoholism and drunken driving in the state, a slight increase may have some utility at a later time when the Wisconsin economy is not in such poor shape. Either way, an increased beer tax now would do nothing but further hurt the state's meager economy. 

 

Ryan Dashek is a junior majoring in biology. Please send all responses to opinion@dailycardinal.com.

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