USA: Beer tax to increase in Iowa State

The government of Iowa State is planning to include a 10-cent per gallon increase in Iowa’s current 19-cent beer tax, according to Tom Vilsack’s budget, The Quat-City Times announced on January 17. The increase would equate to roughly a penny per can or bottle and would raise an extra $7 million annually.

Vilsack would simply pour those new dollars into the hulking general fund with no specific purpose in mind. If the governor gets his way, Iowa will have the nation’s 17th-highest tax on beer. His idea set off plenty of buzz around the Statehouse. But Vilsack is hardly the first politician to take aim at beer.

According to All About Beer magazine, beer taxes are as old as brewing itself. An article found on the magazine’s website credits the ancient Egyptians with levying the first beer tax.

In 1271, the city council in the French city if Aix-la-Chapelle threatened to cut off the right hand of any brewer who failed to pay the local beer tax. Taverns with deadbeat owners were torn down.

Americans have a Republican to thank for the federal tax on beer. President Abraham Lincoln imposed a $1 per barrel tax to help pay for the Civil War. (Lucky for us the GOP has since abandoned the idea of citizen sacrifices in a time of war.)

During recent years, several states facing tough budget times turned to sin tax hikes, including higher beer taxes, to help fill gaping budget shortfalls. Iowa currently has no such budget woes. So why raise the beer tax? Vilsack argues that it’s not fair to call for an 80-cent per pack cigarette tax increase without also hiking taxes charged to beer drinkers. Trust me, it makes all the sense in the world after a few pale ales.

18 January, 2006