Nothing about the recent assault on beer by neo-prohibitionists trying to tax Alcopops (FMBs officially) has made any sense or followed any discernible logic. There’s an end the proponents of raising the tax are trying to achieve, which is purportedly to make Alcopops too expensive for minors to buy. Of course, raising the price will do no such thing, but I suspect they already know that. That they’ve been able to dupe California state agencies into going along with their half-baked scheme suggests no one has thought much about the true consequences of what they’re doing. They’re just keeping their eye on the prize, and the consequences be damned. I imagine all the BOE had to be told was “it’s for the children” and they fell lockstep in line with the neo-prohibitionist agenda. Nobody wants to be against the children, and apparently those are the only two choices available to people of limited mental faculties.
Then, of course, there’s the tax angle. California spun itself into financial troubles several years ago, helped along by Enron’s greed, and it hasn’t recovered yet, not even with the Governator in the role of savior. Social services have been slashed, of course, and lots of little things have been raised, like DMV fees and the like. But it’s still not enough. Lots of people have suggested it’s the fault of beer, not wine or spirits mind you, but beer, because it’s not taxed at a high enough rate. I won’t argue where the tax rate for beer should be, but currently our rate is low compared to the rest of the states, but I’ll also mention that we have more breweries than any other state, which adds a considerable amount to our state economy already.
What I will say, is that the idea that beer drinkers should have to pay for our state’s fiscal irresponsibility is so ridiculous that I’m amazed the argument can be made with a straight face. But that’s what many have proposed, in effect, and today the Sacramento Bee weighed in with their own absurd idea, that goes like this: “Psst! Hey, legislators — looking for some fast cash to ease the budget crisis? Think booze.” The faulty logic, downright incorrect statements and tortured reasoning are in virtually every sentence. It’s as if up really were down in the Bee’s worldview.
Prodded by kids not yet old enough to drink legally, the California Board of Equalization just announced a plan to boost the tax on “alcopops,” those soda pop-tasting alcoholic beverages popular with young drinkers. The increase approved, if it survives a court challenge, will dump an extra $41 million into state coffers.
The plan is not to tax just alcopops, but all beer, unless every brewer files the correct mountain of paperwork for each and every beer they produce, in effect proving to the state that it really is beer and not an FMB. You can see for yourself at the BOE website.
Because flavored malt beverages — products such as Mike’s Hard Lemonade and Smirnoff Ice — contain trace amounts of distilled spirits used as flavoring agents, proponents of the tax hike argued they should be treated like distilled spirits for tax purposes.
FMBs do NOT have any alcoholic spirits in them whatsoever. The “trace amounts of distilled spirits used as flavoring agents” are non-alcoholic chemical compounds taken from the spirits. That’s the whole point of them, they have no distilled spirits in them! They are a beer brewed with barley and corn (or some other combination of grains), and instead of hops the chemical flavoring is added that simulates a taste only marginally similar to the spirit it’s based on. That was done by design specifically so they wouldn’t be taxed as a spirit, but as a beer. But apparently people unfamiliar with how the process works, see the word “distillate” and believe it makes sense to consider them 100% spirits, despite containing, at best, 0.001% non-alcoholic chemicals that came from a distilling process. Even non-alcoholic beer is, by law, 0.5% or less alcohol by volume. So this is just finding a convenient excuse to further an agenda.
But it’s not the alcohol content that makes the product so problematic. It’s alcopops’ appeal to underage drinkers. A beverage that tastes like soda but contains the same alcohol content as beer appeals to children in obviously dangerous ways. The higher tax reflects the very real social risk alcopops pose.
So it’s not the alcohol, eh? It’s simply that it’s sweet and kids with undeveloped palates might like it. Even if that’s true, where did they get such a sweet tooth? Soda is far worse for everybody’s health than beer ever will be, yet we give that to children without any reservations. There are soda machines in school classrooms, for chrissakes. But the real problem with this logic is that just because something might appeal to the people it’s not intended for — minors — it should be punished with higher taxes and be more expensive for adults to buy, too. It’s already illegal for kids to buy, but since we can’t seem to stop them from getting their hands on it, let’s punish adult society generally and the people that make a living from it and already make a positive impact on the economy specifically. That only makes sense if your true aim is not what you state it to be.
The Marin Institute, an alcohol industry watch group, estimates that raising taxes on all alcoholic beverages just 25 cents per drink would raise $3 billion. That’s money the state desperately needs from an industry that has not paid its fair share for a long, long time.
As a colleague of mine put it, “saying the Marin Institute is “an alcohol industry watch group” is like saying the Taliban is a cultural and morality watch group.” The Marin Institute is nothing so grand. They are quite simply a neo-prohibitionist group who wants to return to a time when all alcohol is illegal and they will use any means necessary to achieve that goal. But that aside, saying that taxes should be raised because “the state desperately needs” it is not a valid reason. It may be a result, but what kind of world would we have if every time we needed money, our government looked around for somebody they didn’t like and decided to target them for higher taxes. That’s not a world I’d want to live in. That’s certainly not the high-minded ideals we should be aspiring to.
The truth is, I’m no fan of alcopops, but because I don’t like the taste of them. I find them too sweet and simple, and I dislike them in the same way I hate soda. They have no complex flavor profiles, they don’t really pair with food very well, and they more than likely rob craft brewers of sales, possibly even delaying a new consumer becoming a fan of good beer. But I hate these anti-alcohol attacks even more, especially when they so indiscriminately target beer in their machinations.
Where the taxes on any good or product made should be a policy decision based on a variety of factors, none of which should include manufactured hysteria, the agenda of a misinformed and misguided minority, or an opinion based on a lack of truthiness by a second-rate newspaper.