Laissez-faire

The Michigan Brewers Guild is fighting another tax increase on Michigan beer, proposed by state legislators. They are proposing a nearly 500% increase in the excise tax. This is in addition to sales tax, unemployment tax, self-employment tax, social security tax, city tax, state tax, federal tax, etc., which currently account for about 44% of the price of a beer produced in Michigan. This would be very damaging to an industry already suffering from heavy regulation.

As stated by the MBG in their position statement, “Beer excise taxes are destructive and a detriment to Michigan breweries. They put Michigan’s breweries, especially those that sell a majority of their beer in Michigan, at a competitive disadvantage to competing breweries in the region and across the nation. These Michigan brewers already have to build their home market at an inflated market price over neighboring states. In some cases our State excise tax rate is 300% higher than our neighbors! Increasing this imbalance will impede growth and send more retail dollars out of state; ultimately decreasing the potential for more State revenue.”

The increase in excise tax of approximately 500% is reportedly to adjust for inflation since the last tax increase. This is poor reasoning for a tax increase since inflation itself is a hidden tax. Inflation is the result of an expanded money supply due to the ability of the Federal Reserve to create fiat money out of thin air at the request of the Federal government. The large corporations with close ties to the government benefit at the expense of the low and middle classes since they are likely to be the first to receive the newly minted money. The average citizen simply sees an increase in prices (or the devaluation of the dollar). Justifying a tax increase by claiming it should stay inline with inflation is rubbing salt in the wounds of the taxpayers.

Even if this tax increase is not approved, they will find another way to extract money from the taxpayers. What they will NOT do, is consider cutting overall spending, which is one very necessary step in reviving our ailing economy.

This entry was posted on Monday, July 9th, 2007 at 1:11 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.