Proposed US alcohol tax increases

The US government is proposing to increase alcohol tax in order to fund national health care reform.

The suggested tax increases, which were outlined in Senate Finance Committee documents and leaked to Associated Press, are part of plans to expand health insurance to include some 50m uninsured Americans.

The existing excise tax on a 750ml bottle of wine could increase from US$0.21 to US$0.70 according to a Senate source.

‘These are not proposals, they are options on the table for discussion by Finance Committee members as possible ways to help finance health care reform. No final decisions have been made,’ he told decanter.com.

Reactions from those within the wine industry vary.

‘People always tend to throw their arms up in the air – particularly in the US – when it comes to tax increases,’ says Simon Lambert, senior wine consultant for the Chicago Wine Company. ‘But such a measure would affect [phenomenally successful supermarket wines like] Two Buck Chuck a lot more than classified Bordeaux.’

Steve Silver, owner of Pearsons Wine and Liquor in Washington DC, agrees that it would not make a big difference for buyers of expensive wines, but it would be ‘a regressive tax’ because ‘it would only hurt the guy who cannot afford to pay for a bottle.’

Written by Panos Kakaviatos