Tag Archives: alcoholic beverages

Taxing the Vineyards of California to Oblivion

There’s a new initiative in search of signatures in California. The Alcohol-Related Harm and Damages Services Act of 2010 would increase the excise tax on a bottle of wine from .04 cents to $5.11. That’s an increase of over 12,000 percent.

This tax, as Jason Smith of Paraiso Vineyards notes, will hurt consumers of affordable wines. Say goodbye to the $7 dollar shelf. (If you prefer distilled spirits the tax will rise from 0.65 cents to $17.57 and the excise tax on a six-pack would spike from 11 cents to $6.08).

At first blush it may look like another attempt by government to use sin taxes to balance budgets. But this is a citizen initiative, and the proponents would like to take the anticipated revenues of roughly $8 billion to spend on alcohol-addiction programs.

The initiative’s authors are well-aware that raising the excise tax will raise the price and lead to less drinking (at least of California wines).

To get on the ballot half a million signatures  are needed by August. Beyond that, it’s unlikely to go far. A recent legislative proposal to impose a nickel-per-drink fee on alcoholic beverages was promptly rejected by the Assembly Health Committee.

The public seems unimpressed with the idea of a 12,000% tax hike on wine. One journalist by way of  explaining the initiative’s defects found meaning in its acronym.

Is the U.S. Senate Obsolete?

Syndicated columnist Neal Pierce has been writing about state and local affairs since at lease the 1970s. In a recent column, he asks, “Are State Governments Obsolete?” It might have been more appropriate to ask whether state governments actually exist — at least in the traditional constitutional sense. Blessed by the Supreme Court and other judicial rulings, state governments have become administrative appendages of the federal government.

In one area after another in the twentieth century — matters of transportation, public health, land use control, education, wildlife management, etc. — the federal government assumed powers that had traditionally been reserved to the states. States might still have an administrative role, but they are now working under a very tight federal leash.

The sweeping environmental laws of the 1970s shifted control over clean air and water to the federal government. The states were, to be sure, left to administer air and water pollution laws day to day but under federally approved programs, leaving real control in federal hands. The Endangered Species Act not only federalized significant parts of wildlife management but also asserted federal authority over large areas of state and local land use. No Child Left Behind moved a large step towards the full federalization of education in the United States.

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