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Calif. Tax Proposal Would Increase Beer 30 Cents Per Bottle

Beall: Alcohol Industry Should 'Pay Fair Share'

POSTED: 11:51 am PDT April 10, 2008
UPDATED: 2:44 pm PDT April 10, 2008

California Assemblyman Jim Beall, D-San Jose, said Thursday he has proposed legislation that would increase the excise tax on beer that could generate $2 billion in the state.

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"The fallout from alcohol consumption costs Californians nearly $36 billion a year in increased health costs, crime, lost productivity and injuries from accidents and abuse," Beall said. "It's time for the beer industry to help us with the staggering burden it has helped to create."

According to a statement from Beall's office, the money could be used for "health and law enforcement services that must cope with the havoc -- traffic accidents and fatalities, domestic violence, and illnesses -- that is fueled by the alcohol industry."

"Beer is the alcohol of choice for under-age drinkers," Beall said. "Research tells us that kids who begin drinking before they are 15 are more prone to become alcoholics. They are also more susceptible to alcohol-related problems such as vehicle accidents and assaults later in life than people who wait until they are 21 or older to take their first drink."

The proposal would increase the tax on a six-pack of beer by $1.80, or 30 cents per can or bottle, according to a statement from Beall's office.

Images: Best Beers To Avoid Beer Gut
Images: Oktoberfest 2007

A two-thirds majority of the Legislature is required to get the measure before voters who must also approve it by a two-thirds majority.

The bill's language has not yet been finished, according to the statement.

If passed, the tax would be the first new levy on beer in California since the federal government hiked its beer tax in 1991 by 2 cents a can.

The tax on a pack of cigarettes is 87 cents, according to the statement.

Accounting for inflation, California's alcohol and beer tax has declined by 45 percent since 1992, according to Beall's office.

The tax would be levied against the manufacturer, which often chooses to pass the cost on to consumers.

Beall claimed the tax could help fund money for emergency and trauma care, prevention and intervention programs, crime prevention, mental health services and treatment, victim assistance, school counseling, and programs to prevent under-age drinking.

In 2005, alcohol-related traffic crashes claimed 1,574 lives and injured 30,810 in California. In 2004, alcohol played a role in 3,691 deaths statewide, according to the California Department of Alcohol and Drug Programs.

About one-half of all sexual assaults in the United States involved drinking by either the perpetrator or the victim, or both, according to a 2002 study funded by the National Institute on Alcohol Abuse and Alcoholism.

Beall said the money would "force those responsible for the problem to pay for it. One-third of the population does not drink but yet two-thirds of the alcohol-related costs for health care and prevention are borne by government programs."

Beall claimed the tax could make beer harder for teens to obtain because of higher prices.

Beall's office cited a National Academy of Science study on under-age drinking that recommended a raise in taxes on beer to curb consumption by teen-agers who, as a group, are highly price-conscious.

"Other researchers have concluded that raising beer taxes not only minimizes drinking but reduces alcohol-associated problems such as broken families, venereal diseases, property damage, and birth defects caused by fetal alcohol syndrome," Beall's statement read.

Beer corporations continue to rake in profits. The United States' largest brewer, Anheuser-Busch, reported a net income of $2.1 billion in 2007, nearly 8 percent above the previous year; Molson Coors reported $507 million in revenue after taxes.

"As responsible corporate citizens, breweries should be willing to pay their fair share of the damage that alcohol wreaks on society," Beall said.


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