Doubling of beer tax a bit heady
Some beer makers these days are so small they’re not microbreweries, but nano- or picobreweries. Not too small, though, to be missed by the state’s huge proposed beer tax.
Seattle Times staff columnist
Justin Gerardy isn’t running just a small business. He’s so tiny he’ll test your recall of how low the metric system can go.
“There are microbreweries, and below that a newer category called nanobreweries,” Gerardy tells me, while stirring a boiling pot of beer mash. “But lots of nanobreweries are three or four times bigger than me. So now people have come up with the names picobrewery, or femtobrewery.
“I’m basically a beer lemonade stand.”
Gerardy runs the new Standard Brewing, at 25th and Jackson in Seattle, tucked behind an East African halal market. Alone, he brews about three barrels of beer per week, which he sells by the glass to folks seated at eight stools in the front of the store.
He is so off the typical business grid he uses a window air-conditioning unit to cool his beer. And a hair dryer when he needs to warm it during fermentation.
But he’s not too small to be missed by the state’s huge proposed beer tax.
Gov. Jay Inslee recently proposed an excise tax on big beer breweries, but also on microbreweries that sell fewer than 60,000 barrels a year. It would apply all the way down through nano, pico and femto to Standard, which makes 1/400th of that amount.
Sure, beer’s a luxury — the “beautiful amber nectar of the gods,” as Inslee called it. But what is unusual here is the amount of the increase. It would jack Gerardy’s beer tax, per barrel, by 325 percent — more than quadrupling the rate.
“What tax gets quadrupled?” Gerardy said. “I’m not going to be alarmist and say it would shut me down. But, man, it’s going to hurt.”
Last week state House Democrats unveiled their version of the beer tax, which would double the rate for small breweries. That’s less of a whammy, and Inslee is likely to go along with it. But still — what tax gets doubled all at once, let alone quadrupled?
Gerardy, who started selling his rye pale ales and other classic brews just last month, said it’s like being kneecapped.
“Taxes are a part of business,” he said, “but I really believe in giving people a chance to get started before you hit them too hard. This is like it’s designed to knock my legs out from under me before I can stand.”
Now, granted, this is a sin tax, which the state always looks to boost first. But it’s a matter of degree. Imagine if someone doubled or quadrupled a tax that you pay, such as the sales or property tax. You’d need more than a few beers to calm you.
A few years back I had a running contest going to find the steepest one-time tax increase. The state once proposed raising taxes on cigars by a choking 500 percent. The all-time winner though was when Seattle boosted a drainage tax on agricultural lands in the city by 835 percent — more than ninefold.
That last one was so extreme we got it changed.
My point isn’t to be anti-tax. But for taxes to work — to be accepted — they have to be reasonable and broadly shared. Nothing destroys a sense that we’re all in it together more than doubling, quadrupling or even nonupling (nine times!) a tax on one small segment of society.
Let alone one so small it takes the metric system to describe it.
Danny Westneat’s column appears Wednesday and Sunday. Reach him at 206-464-2086 or firstname.lastname@example.org
About Danny Westneat
Danny Westneat takes an opinionated look at the Puget Sound region's news, people and politics. Send tips or comments to email@example.com. His column runs Wednesday and Sunday.
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