By Jay Brooks
Tuesday, July 6th, 2010 at 9:48 pm in On Beer.
Two weeks ago, the City of San Francisco proposed a new fee to be added to every drink sold in the city. It was proposed by supervisor John Avalos, but it was created by the Marin Institute, an anti-alcohol group in Northern California. It’s being sold as recouping money spent by people who drink too much and burdening the city’s health and justice system. But the fee unfairly targets everyone who drinks alcohol, including the vast majority who do so responsibly and don’t overtax those resources. It would most likely raise nowhere near the amount its proponents expect and will undoubtedly cause a loss of jobs. And we can’t even say what the impact will be, because the required nexus study has not even been made public, despite the fact that the vote on the ordinance is only a week away.
Most mainstream news outlets have covered just one side of the issue, though on my personal blog, where I write more about the politics of beer, I tried to give the other side of the story with two posts, San Francisco Wants To Add Alcohol Fee To Every Drink and Alcohol Fees Vs. Taxes: The Sinclair Decision, which is the controlling legal case for imposing fees of this type. I also rebutted Chronicle columnist C.W. Nevius’ column supporting the proposed fee on alcohol in the city. In his column, he interviewed the California Alliance of Hospitality Workers so he could appear to show both sides of the argument. It was not really in any way balanced, and in fact I think he used them as a straw man, though he did so in a way that I believe was incorrect at any rate.
Happily, the California Alliance of Hospitality Workers is fighting back, and is trying to get people to contact their local supervisor in San Francisco to have city residents ask their politicians to oppose the proposed fee. The e-mail to use is Board.of.Supervisors@sfgov.org. If you live in San Francisco and drink alcohol in moderation and responsibly, please contact your supervisor and ask him or her to oppose the ordinance.
You can also see their response to the proposed ordinance, Supervisors’ Short-Sighted Proposal to Tax Alcohol Will Hurt Hard-Working San Franciscans. They’ve also set up a Facebook page.
Here’s just a few more reasons why this tax is unfair, particularly to craft beer:
- This legislation taxes beer by alcohol strength, putting a huge and cumbersome burden on brewpubs, self-distributing small brewers and wholesalers because each and every beer is taxed at a different rate.
- Craft brewers are not part of the problem. Craft beer is priced high and is a product of quality, not quantity. Craft beer drinkers do not abuse their beverages.
- With the “margin chain” and price point consideration, the tax will be much higher than five cents a drink. At retail off-premise, the increase will be about 50-75 cents a six-pack and on premise about 75 cents to a dollar per pint.
- Brewers are already heavily taxed. Small brewers already pay a state and a federal excise tax in addition to all other business and sales taxes. Combined, about 40-44% of the cost of a beer already goes to taxes.
- Higher drink prices in a singular market such as San Francisco will lead consumers to not come into the City for dining and entertainment.
- Higher taxes will lead to lost jobs, off-setting the new tax.
- The proposed tax would hinder the ability of craft brewers in the City to grow, employ more people and positively contribute to City’s economic recovery.
- Higher taxes will mean higher prices which means lower sales. If this tax in imposed, sales will decrease and craft brewers will not be able to sustain the ability to continue full employment or continue to invest in our business and community.