Politics in the other Washington blogging, cont: Beer
By And while I’m the subject of poor governance in WA, it occurs to me I haven’t complained here about our new governor’s terrible beer tax idea. I’m not an anti-tax person, and I’m not even that anti-Pigovian tax; I recognize that such taxes can have benefits that outweigh their tendency to be regressive. If Inslee were to propose, say, a consumption tax for beer, raising the cost of everyone’s pint by a quarter or something, I wouldn’t be particularly bothered. But his idea is much worse.
Background: in 2010, for reasons that aren’t entirely clear because the revenue raised must have been utterly trivial, the legislature imposed a temporary tax for beer production for breweries producing more than 60,000 barrels a year. Or, to be a bit more precise, they raised Redhook’s taxes. Inslee has been calling for this tax to be “extended and expanded”, in other words, made permanent and without the exemption for breweries producing less than 60,000 barrels a year. Or, in other words, all breweries in Washington not named Redhook. This tax would have raised the rate per barrel from around ~five dollars to over twenty. In Oregon, a state conveniently near Washington that’s known to produce some pretty good beer as well, pays around 2.60 a barrel in taxes.
The house compromise is certainly an improvement, but if we’re going to tax alcohol, there’s no good reason to a) discriminate against beer, and b) discriminate against local producers. Tax consumption or don’t bother.
This effort to inject a new idea on the part of the new Governor doesn’t exactly render me enthusiastic about Inslee going forward: he noticed that Washington has a fast-growing new industry with lots of start-ups and creating a fair number of new jobs, but with razor-thin margins, and said to himself “we change the tax structure in a way designed to harm this industry’s ability to compete with out of state competitors!” “Better than Gregoire” is a very low bar, and I’m not yet convinced Inslee will clear it.