Beer Tax May Pay for Health Insurance

WASHINGTON (AP) - Joe Six-Pack may have to hand over nearly $2
more for a case of beer to help provide health insurance for all.

Details of the proposed beer tax are described in a Senate
Finance Committee document distributed to lawmakers before a
closed-door meeting Wednesday. Senators are focusing on how to pay
for expanding health insurance for an estimated 50 million
uninsured Americans, a cost that could range to some $1.5 trillion
over 10 years.

You can't raise that from beer money alone.

Lawmakers are looking at an extensive list of spending cuts and
tax increases, including a new levy on the value of job-based
health insurance. The latter proposal seems to be gaining ground.
It could lead to higher income taxes for some people with
particularly generous job-based health care.

Finance Committee Chairman Max Baucus, D-Mont., said no
decisions were made, but he will use the feedback to shape
legislation he intends to introduce in the next few weeks. The
committee has a critical role to play in the health care overhaul,
since it writes tax law and oversees the government's giant medical
insurance programs. Baucus wants to write a bipartisan bill, a goal
for President Barack Obama.

"Nothing's pushed off the table," Baucus told reporters after
the daylong meeting. He said senators have come closer on some
issues, but much remains to be resolved.

While many of the revenue raisers involve obscure provisions of
federal law, most consumers can relate to a beer tax.

Taxes on wine and hard liquor would also go up.

And there might be a new tax on soda and other sugary drinks
blamed for contributing to obesity. A tax of 3 cents per 12-ounce
drink would raise about $50 billion over 10 years, according to
congressional estimates. Diet drinks, however, wouldn't be taxed.

The idea behind the proposed increases is to tax lifestyle
choices that contribute to rising medical costs. Obesity puts
people at risk for diabetes and heart problems. Alcohol abuse is a
risk factor in several types of cancer, liver disease and
psychological problems.

The soft drink industry and beer and wine producers are already
lobbying to stop the proposals before they gain traction. The tax
increases would lead to job losses for workers and higher costs for
recession weary consumers, say the industries. Wine makers are also
pointing to studies that suggest a glass a day can be good for
health.

"Singling out wine for higher taxes to reform health care is
misguided because wine is part of a healthy diet and lifestyle for
millions of Americans," said Robert P. Koch, president of the Wine
Institute, which represents California's industry.

Under the proposal lawmakers are considering, beer taxes would
be increased by 48 cents a six-pack, from the current 33 cents.
Beer is still the favorite choice of Americans who drink alcohol.

Wine taxes would rise by 49 cents per bottle, from the current
21 cents.

And the tax on hard liquor would increase by 40 cents per fifth,
from the current $2.14.

Percentage-wise, wine drinkers would take the biggest hit, a 233
percent tax increase per bottle. The Wine Institute said the tax
increase would be even bigger for wines with a higher alcohol
content.

Hard liquor would see the smallest proportional increase, 19
percent per fifth.

The beer tax would rise by 145 percent per six-pack.

Proponents of the idea say it would equalize the tax treatment
of alcoholic drinks, by charging the same tax rate based on alcohol
content to all. But that would put an end to the current tax
advantage enjoyed by beer and wine.

The higher alcohol taxes would bring in nearly $60 billion over
10 years.


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