Categorized | Opinion

Wine Tax Won’t Solve Problem. Oil Severance Tax Would Do More.

By Randy Bayne

Randy Bayne

One of the problems with bridging the $24 billion state budget gap is too small thinking. Voters are tired of solutions that don’t go far enough and are aimed at too small a revenue pool. More than anything, that is probably the message sent in Tuesday’s special election.

One proposed tax that won’t help, and will likely do more damage than good is the one proposed on wine. Let me first say that “sin” taxes don’t really make a lot of sense in my mind, unless it is hoped that the “sinning” will increase. Take smoking for instance. We tax the heck out of tobacco, yet we hope for diminishing purchase and use. If use actually does go down the revenue from the increased taxes will go down too. Of course, tobacco users will just be taxed more onerously. It’s a vicious cycle that solves nothing, but sure makes nonsmokers feel good.

So, increasing taxes on wine from the current 20 cents per gallon to $1.48, a more than seven-fold increase, while it may make some people – those who don’t drink wine – feel good, in the long run probably won’t really have any great impact on bridging any budget gap, but it will have an impact on driving down business and tourism in the state’s wine regions. The Amador County Board of Supervisors is right to oppose the move. It looks good on paper, but will have little, if any real impact, except to perhaps drive down wine sales.

Bridging the budget gap will take much bigger thinking. Unfortunately, Republicans oppose any tax, especially those that will cause some small sacrifice from their rich buddies. Oil severance comes to mind. California is the only state that doesn’t ask oil companies to pay for taking oil out of our ground. It’s time we did, but Republicans oppose this good idea. And how about the ultra rich? Higher tax rates should be restored so that those who are making the most money are paying their fair share and the poorest among us don’t feel like were supporting them. The rich don’t have to pay new taxes, just the old rates they used to.

Unfortunately, those most opposed to taxing wine are also opposed to any alternatives, like the ones mentioned above. Until Republican legislators are willing to meet halfway by raising some taxes while making some cuts the state of California will continue to be one of crisis budgeting. Democrats have done their part. They have already offered and made cuts that are horrific to most Californians. It is time for Republicans to do their part and consider meaningful tax increases that will raise real revenue. Targeting wine isn’t going to get us there, and in the end will probably do more harm than good.

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