3649233

Huge Michigan Beer Tax Proposed

3649233

"What's Tom Hooker drinking?" That was the immediate response from Michigan Freedom Fund Executive Director Tony Daunt to word that Grand Rapids Republican Representative Tom Hooker had introduced a measure in the state house designed to raise the tax rate on beer in Michigan by 250-percent. Daunt wasn't alone in his criticism, either, as the Michigan Beer & Wine Wholesalers Association and the Michigan Chamber of Commerce also called for a slam-dunk on the deal.

Daunt's Michigan Freedom Fund statement added, "Hooker's bill is bad for the state's craft brewing industry, bad for Michigan residents, and devastating for his home district — Beer City, USA. The last thing Michigan needs is another lawmaker drunk on tax hikes and government spending. Let's hope Lansing puts this terrible bill on ice."

Daunt was responding to the Grand Rapids-area lawmaker's plan to raise the government's tax rate from $6.30 per barrel to $21.70 — more than tripling the current tax, overnight. 

Michigan Chamber of Commerce President & CEO Rich Studley contends that the tax hike would put businesses at a huge competitive disadvantage with neighboring states, and would take a wrecking ball to an industry that is currently thriving. Studley says, "Raising the beer tax is a bad idea from a lame duck lawmaker. A nearly 250-percent beer tax hike would have a chilling effect on Michigan's craft brewers, distributors and retailers and would bring this growth industry to a grinding halt."

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Spencer Nevins is President of the Michigan Beer & Wine Wholesalers. He says, "This shortsighted proposal by Representative Hooker would increase the state's beer tax, already the highest in the Great Lakes region, by 250-percent." He adds, "Increasing the beer tax will hurt each and every retailer, distributor, brewery and brewpub in Michigan." He notes that Michigan's beer industry pumps $6.6-billion into the state's economy, employs thousands of people and generates hundreds of millions of dollars in tax revenue. 

Tricia Kinley is Senior Director of Tax & Regulatory Reform for the Michigan Chamber. She says, "So-called sin taxes do not work; they simply drive people to buy legal products from lower-cost states." She points out that Michigan's beer tax is already 28-percent higher than the next state on the list in the Great Lakes region of Michigan, Indiana, Illinois, Ohio and Wisconsin. She notes, "In many cases, these so-called sin taxes backfire because people turn to illegal purchasing methods." She reminds everyone that "Coupled with the fact that Michigan has a 10-cent bottle deposit add-on, border county beer drinkers (like here in Berrien and Cass Counties) will likely just buy beer in Indiana and Ohio, making a bad idea worse!"

Studley concludes, "We strongly oppose this ill-advised effort to raise the beer tax. This legislation is bad public policy and will only serve to harm a thriving industry. We urge House lawmakers to reject this tax hike and work on more worthwhile bills."

Hooker's proposal is even stranger when you consider that his native Grand Rapids-area recently launched a massive public relations and tourism campaign promoting the local craft brewing scene, unveiling the Our Beer City Ale Trail, highlighting more than 40 local breweries. Freedom Fund's Tony Daunt quotes Experience Grand Rapids as saying Grand Rapids "has more craft beer per square mile than almost anywhere else on earth."

Stay tuned.

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