Sunday, April 13, 2008

Homer Simpson Wont Be Happy About Visiting California

Homer Simpson is a beer lover. That's one thing that most certainly cannot be denied about the lovable oaf. You don't want to get between him and his beer.

Yet, a California legislator are thinking of taxing the bejeebus out of beer to raise nearly $2 billion a year in revenues. Fortunately for Homer and everyone else in the state, the legislator has a huge hurdle to climb - not only does he need 2/3 approval in the legislature, but has to get voter approval.
Joe Six-pack will have to pay a lot more to get his buzz on if Assemblyman Jim Beall has his way.

The San Jose Democrat on Thursday proposed raising the beer tax by $1.80 per six-pack, or 30 cents per can or bottle. The current tax is 2 cents per can. That's an increase of about 1,500 percent.

Beall said the tax would generate $2 billion a year to fund health care services, crime prevention and programs to prevent underage drinking and addiction.

"The people who use alcohol should pay for part of the cost to society, just like we've accepted that concept with tobacco," Beall said.

He added that the beer tax hasn't been touched since 1991, and the increase then was meager.

But the freshman lawmaker will have to lift the legislative equivalent of a full keg of beer over his head to get his tax enacted. That's because it would require a two-thirds vote in the Assembly and Senate - and then, because it's a constitutional amendment, it would have to be approved by voters. Republicans say it's a non-starter.
States are in serious fiscal trouble and raising income and property taxes aren't going to be palatable to voters, so raising obscure taxes and fees or imposing more sin taxes are the ways legislators attempt to raise state revenues. We've seen something similar in New York, as the state tacked on another $1.50 per pack of cigarettes to raise hundreds of millions of dollars in revenues to try and fund various programs, despite the fact that these tax hikes on sin taxes may spur problems all their own.

Not once do these states consider cutting state spending in a serious way or attempt to deal with structural deficits caused by underfunded pension plans or luxurious state contracts that states were ill capable of affording when passed by which guaranteed state union support come election time.

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