11 March 2010

How Does a 1,289% Tax Increase Sound?

We all know that the current governmental financial situation, state and federal, is unsustainable.  Yes, among other things, we have to consider raising taxes.

How does a 1,289% increase in your beer taxes sound?

That's the proposal out of Annapolis right now.

A state Senate committee was expected to consider a bill Wednesday that would raise the state tax on beer by twelve-fold.
Lawmakers on both sides of the General Assembly are weighing bills to raise taxes on all types of alcoholic beverages. The measure could add more than $200 million in annual tax revenue to state coffers.
The House of Delegates is slated to hold a hearing on the bill Thursday.
Both the Senate and House legislation would change tax rates from:
• $1.50 per gallon to $10.03 per gallon for distilled spirits [a 669% increase] ;
• 40 cents per gallon to $2.96 per gallon for wine [a 740% increase]; and, 
• 9 cents per gallon to $1.16 per gallon for beer. [That's right: 1,289% increase.]
A chunk of the revenue — 42.25 percent — would go to Maryland’s Medicaid Trust Fund, to help pay for health care of low-income residents. Another 45 percent would be divided evenly among state funds that support people with developmental disabilities, addictions and mental health issues.
The remaining 12.75 percent would go to the state’s general fund, used to fund day-to-day operations and salaries in state agencies.
Nonprofits are urging the passage of the bill to increase funding available for health and mental health care.
“Thousands of children and adults with developmental disabilities languish on waiting lists for services essential for them to live and work in the community,” Cristine Marchard, executive director at the Arc of Maryland, said in a statement.
The Maryland Chamber of Commerce hasn’t taken a position on the bill.
Once again, beer is discriminated against.

You know what to do.

March 9, 2010
Dear Maryland Beer Activists,
The Brewers Association of Maryland has requested that beer enthusiasts take action to oppose legislation seeking to increase the state excise tax on beer and other alcoholic beverages.
Maryland Beer Enthusiasts,
Maryland House Bill 832 and Senate Bill 717 would raise MD beer excise taxes about 12 fold, making MD among the highest alcohol beverage tax states in the country. Consumers would pay up to $4.50 more for a case of beer in Maryland.
Both bills are scheduled for committee hearings in the next two days – time for action is short!
The sponsors are passing this legislation off as a harmless proposal that Marylanders pay an additional “dime a drink” – which certainly sounds reasonable enough. But if you look a little deeper, the true impact could be to increase the cost of a case of beer at retail by about $4.50 per case – anywhere from a 15 to 25 % increase in cost to the consumer.
Also, let’s not forget the inestimable benefit this tax increase will deliver to our good neighbors in Virginia, West Virginia, Delaware, Pennsylvania and DC. Think of all the Marylanders who will flock to those states to buy beer, wine, and liquor – saving fairly large dollars and making sure that all that money goes out of state, and hurting Maryland businesses and jobs. We need to keep the playing field level!
This kind of legislation is more about small business rather than beverage alcohol. Those of us in this industry are an easy target – remember, they call it a “sin tax”! But just because we are an easy target doesn’t make it either right, good business, or even more importantly, good tax policy.
We are collectively just now beginning to emerge from one of the most difficult economic times in our history. This is NOT the time to take this kind of action. Let MD small business get back on its feet, and then let’s look at options for balancing the state budget correctly - with broad based initiatives rather than penalizing any one industry.
Please communicate to your state Delegate and Senator that you oppose these bills:
  1. Click here.
  2. Enter your address and city and hit "Find Elected Officials"
  3. The next screen will give you email links to both your State Senator and Delegates.
  4. Send them an email today! Please be respectful, but tell them what you think!
Thank you,
Brewers Association of Maryland
Thanks for your support of Maryland’s small brewers.

Charlie Papazian
Brewers Association

Gary Glass
American Homebrewers Association

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