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DFL\’s Deficit Solution : More Taxes On Beer

April 19th, 2009 by Kevin

House Democrats will release their tax increase proposal on Monday, but this week they gave a preview of what they may be thinking. Below is information distributed to legislators detailing opposition to bills offered by Rep. Karen Clark (DFL-Minneapolis) to increase beer taxes – HF 1896 and HF 2125. A recent City Pages article did not reflect favorably on Rep. Clark, quoting one unnamed lobbyist as saying \”She\’s not really in touch with reality,\” and another, \”Forgets there is real impact to her crazy ideas.\” The bill was not given a vote(a small win for beer drinkers) but could pop up in the overall tax increase bill next week.

Here is the info:
HF 1896 (Clark) creates an “alcohol health and judicial impact fee” of 2.5 % on all retail sales of alcohol in Minnesota plus an additional $6.61/barrel. These two “fees” would increase the taxes on a barrel of beer by over $14.53/barrel or a 43.8% increase. One-half of this increase would go to the general fund and one-half would go to a health and judicial impact fund.

HF 2125 (Clark) would raise the state excise taxes on a barrel of beer from $4.60 to $37.52, an astonishing nine-fold increase, or nearly 100%.

The dramatic tax increases embodied in HF 1896 and HF 2125 are on top of the existing $18.00/barrel federal excise tax, the existing $4.60/barrel state excise tax, the 6 1/2% sales tax, and the existing 2.5% alcohol sales tax. HF 1896 would raise the price of a case of beer by at least $2.00 per case and HF 2125 would raise the price of a case of beer by at least $3.90 per case.

Already, taxes on beer represent over 40% of the retail price of beer. This is substantially higher than other products.

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