Portland is said to have the highest number of breweries per capita in the United States. Oregon also has one of the country’s lowest beer tax rates. Coincidence?
We may soon find out. A bill in the legislature would raise the tax on beer from $2.60 per barrel to nearly $50. According to Tax Foundation data, that would give Oregon by far the highest beer tax in the nation. The money will be used largely to fund drug prevention and recovery programs. It’s a shame we can’t legalize drugs and tax them directly, but why should beer drinkers bear the cost?
Even if you think higher taxes on alcohol are justified on Pigovian grounds, this is a horrible year to impose them. Oregon has one of the nation’s highest unemployment rates right now. This bill would hurt one of the state’s few thriving industries while discouraging consumption at a time when governments are struggling to raise it.
If the state is desperate for money, there’s a very simple way to obtain it and encourage people to spend more: repeal the smoking ban that went into effect last month. Video poker and lottery sales are down $3 million per week compared to January 2008. The ban isn’t the only cause, obviously, but it’s likely a significant one.
Unfortunately, Oregon isn’t the only state using budget woes as an excuse for picking imbibers’ pockets. Nick Gillespie notes that Kentucky is raising taxes too. Expect to see more of this as the year goes on.