Tuesday, May 26, 2009

Drinkers to Fund Health Care?

The Senate is searching for ways to fund health care reform, and one of the proposals is to massively increase the excise taxes on beer and wine sold in the United States. The proposal is disguised as an attempt to make the taxes more uniform for different beverages, but it would do so by raising them to a uniform rate far higher than is currently being charged.

Proponents of the tax increase make the argument that it would "promote wellness and healthy choices, and curb activities that increase overall health care costs". In other words, it's a "sin tax", though medical research is famously unclear about whether moderate alcohol consumption is good or bad for one's health. It seems a little ironic to tax one of the most enjoyable forms of heart medicine on the planet, in the name of promoting wellness.

More significantly, the tax would work out to be tremendously regressive. "Joe Six-Pack" spends a higher percentage of his weekly income on cheap beer than some bon vivant toasting polo season with fine champagne. According to the Beer Institute, "Approximately 50 percent of all beer purchased in the United States is by consumers with household incomes of $50,000 per year or less. That means the relative impact of beer excise taxes on households in the lowest income brackets is 6.5 times greater than those with the highest incomes." Ironically, because the focus is on amount of alcohol rather than retail price, I would pay less in excise taxes for a fancy six-pack of imported Belgian Wit beer than some poor guy picking up a six-pack of Mickey's.

I am supportive of health care reform, but I think the Senate is off on the wrong foot in seeking to raise funds. If the goal is universal health care, the burden should be borne by a wider segment of the population than poor people who enjoy a glass of beer. If you agree, here's a list of the Senators considering this proposal in the Senate Finance Committee:
DEMOCRATS
MAX BAUCUS, MT - http://baucus.senate.gov
JOHN D. ROCKEFELLER IV, WV - http://rockefeller.senate.gov
KENT CONRAD, ND - http://conrad.senate.gov
JEFF BINGAMAN, NM - http://bingaman.senate.gov
JOHN F. KERRY, MA - http://kerry.senate.gov
BLANCHE L. LINCOLN, AR - http://lincoln.senate.gov
RON WYDEN, OR - http://wyden.senate.gov
CHARLES E. SCHUMER, NY - http://schumer.senate.gov
DEBBIE STABENOW, MI - http://stabenow.senate.gov
MARIA CANTWELL, WA - http://cantwell.senate.gov
BILL NELSON, FL - http://billnelson.senate.gov
ROBERT MENENDEZ, NJ - http://menendez.senate.gov
THOMAS CARPER, DE - http://carper.senate.gov

REPUBLICANS
CHUCK GRASSLEY, IA - http://grassley.senate.gov
ORRIN G. HATCH, UT - http://hatch.senate.gov
OLYMPIA J. SNOWE, ME - http://snowe.senate.gov
JON KYL, AZ - http://kyl.senate.gov
JIM BUNNING, KY - http://bunning.senate.gov
MIKE CRAPO, ID - http://crapo.senate.gov
PAT ROBERTS, KS - http://roberts.senate.gov
JOHN ENSIGN, NV - http://ensign.senate.gov
MIKE ENZI, WY - http://enzi.senate.gov/public/
JOHN CORNYN, TX - http://cornyn.senate.gov/public/
(For more analysis of the issue, read this article.)

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