The late Louisiana Senator Russell B. Long once famously said, “Don’t tax him, don’t tax me, tax that man behind the tree!” Recently, Gov. Jay Inslee found us all behind the tree.
The discussion and debate about the proposals to continue a temporary beer tax increase and expand it to even the smallest breweries has been played out in the media, between politicians and certainly among Washington’s hard-working, middle-class beer drinkers. Unfortunately, instead of reining in Olympia’s spending problem and waste in the state’s budget, Gov. Inslee introduced his own plan to increase taxes on beer to address Washington’s budget mess, despite campaign promises to the contrary.
The governor’s political allies and others have argued that he didn’t specifically promise not to raise our taxes. This may be true, but Washingtonians should be able to expect more from their elected leaders than typical political spin meant to confuse and obfuscate true intentions in order to garner votes.
As Washington's oldest and largest craft brewer and the only brewery currently subject to the nearly 200 percent tax increase implemented in 2010, Redhook would feel a unique and dramatic impact. The possible extension of the supposedly sunsetting tax creates additional economic uncertainty. That inhibits our ability to compete, grow our business, create jobs and deliver tax revenues to the state that are fair, sustainable and non-punitive.
This year alone, Redhook will pay nearly $300,0-00 in additional taxes on barrels subject to the 2010 tax increase. That’s money that is not going to capital expenditures, new jobs or investments in our community. Up to this point, to remain competitive and with the understanding and trust that the tax would indeed be temporary, Redhook has absorbed the burden and maintained our pricing.
If the tax is extended, we will be forced to either pass on the costs to consumers or make difficult cost reductions related to our local workforce. These are decisions that could be prevented if Olympia politicians keep their promise.
Furthermore, extending Washington’s unfair tax rate of $23.58 per barrel would put us at a competitive disadvantage with surrounding states. By contrast, Oregon’s per barrel tax rate is $2.60, or 905 percent lower, and Idaho’s is $4.65, or 506 percent lower than Washington’s.
These states favor public policies that keep beer taxes low, create a robust brewing environment and support the development and investment in the industry that leads to job growth. Our leaders need to recognize this disparity and put forth balanced and rational budget proposals, unlike the governor’s, that doesn’t single out or penalize a specific industry by imposing a nearly 200 percent tax increase on their product.
Abraham Lincoln once said, "I am a firm believer in the people. If given the truth, they can be depended upon to meet any national crisis. The great point is to bring them the real facts, and beer." Politicians in Olympia would do well to heed this advice, keep their promise and allow the beer tax to expire.