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Thinking Out Loud…Tax the Wine, Feed the War!

wine-tacks

“Wine Tax!”

I’m just thinking out loud here, and I apologize for the sensationalized headline, but I do have a point of view on this subject.  With the economy in ruins, the government has taken on the role of bailing out companies & individuals to jump start the economy.  The current tactic is to feed revenues to the government to increase the income side of the country’s P&L so it can have the funds to pay for the bailouts.  Simple accounting — increase taxes to generate revenues — spend ‘appropriatly’ to feed the economy.

One of the government ‘income’ proposals is to tax alcoholic beverages – in some states that translates to a 10% tax per drink — in others (such as California) it translates to a ‘nickel a drink’ tax to raise revenues earmarked to reduce the budget shortfall and provide support to programs addressing alcohol related problems.

I suppose this sounds good on paper — but wait a minute — more taxes simply don’t translate into appropriate spending!  It takes a great leap of faith, I believe, to think that a government (that’d be any government) has the expertise to prudently re-invest revenues earned.  In fact, I think they have an incredible track record of doing exactly the opposite — feeding more and more bureaucracy and building less and less efficiencies.  President Obama has told Chrysler & GM that their re-structuring efforts just aren’t good enough — yet I’m seeing an enormous amount of money going into both state & federal governments hands, with little accountability and results.   They are asking companies to cut, yet they are growing.  Hmmm.

Don’t get me wrong, I believe government is critical for the efficient running of a country — I just don’t believe they are adept at business, and I simply don’t trust that the money going in, is spent appropriately.  And now they want to tax alcoholic beverages even more.  Is this the intent of our Founding Fathers?  I just don’t think so.

One of the foundations of the Humanitas business model is to, by virtue of selling wine, generate revenues to give directly to charities.  These charities operate extremely efficiently – with only a small percentage of the revenues generated going to the overhead needed to manage the charity — and the vast majority going directly to those in need.  Can we say the same for our government spending?

I’m quite certain readers have an opinion on this — please share in the comments section.  I, for one, am tired of increased taxes with no accountability for the results.  I’ll just lob that one up for a start.

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6 Comments

  1. Patrick Mahaney wrote:

    “Giving money and power to government is like giving whiskey and car keys to teenage boys”
    (P.J. O’Rourke)

    “I don’t make jokes; I just watch the government and report the facts”
    (Will Rogers)

    “I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle”
    (Winston Churchill)

    “A government that robs Peter to pay Paul can always count on the support of Paul”
    (George Bernard Shaw)

    ” A government big enough to give you everything you want, is strong enough to take everything you have”
    (Thomas Jefferson)

    Tuesday, March 31, 2009 at 7:56 pm | Permalink
  2. Trish Cyman wrote:

    I have worked for “government agencies” as well as small businesses – mostly restaurants. I can’t say I agree with your blanket statement about government-run agencies. In my experience, there are pages of regulations and measures of accountability in anything to do with government funds. Most of the employees are underpaid by industry standards. Many are dedicated.
    However, I am not clear that supporting non-government businesses with tax-dollars is the answer. These private business clearly mismanaged their concerns. Where is the accountability you call for? Those who profited at their company’s expense will walk away with their booty while the rest of us struggle with the consequences. This is what has become widely accepted as “capitalism” – a snow job, if you ask me. My fear is that “accountability” has become equated with “regulation”.
    I don’t know if anyone has developed the correct mix of government and private concern. It seems to me this has been hotly debated for decades (if not centuries). I like the constitution’s balance of power. Balance, however, is dynamic and must always be finessed.
    The economy is a mess. I would not want to be the one in charge of unraveling this financial knot.

    Wednesday, April 1, 2009 at 9:06 am | Permalink
  3. Judd wrote:

    Trish — thanks so much for the counter-balance in this dialogue. I know I went a bit anti-government on you — I’m just sick & tired of taxation. Our industry is double & triple taxed up the wazoo & I simply don’t know where the money goes. I’ve never seen taxes go down…ever. Your comment about ‘accountability’ has become ‘regulation’ is dead on — and that’s what scares me. Unfortunately, many of these companies being bailed out by the government got into the situation because of the incentives given to them by the government in the first place — kinda comes full circle. An argument can be made that regulation destroys capitalism, while equally on the side, fear of capitalism drives regulation. Unfortunately, the one side equates capitalism with corruption — the other equates the goverment with corruption. Rock…meet hard place. Regardless, I’m tired of taxes. Period. For Humanitas, it directly correlates to taking money out of the hands of the charities I support.

    Wednesday, April 1, 2009 at 11:58 am | Permalink
  4. Trish Cyman wrote:

    I thought it timely to check on some old pie charts from my non-profit days: the pie still shows significant budgetary allocations going to….guess…yes! the military!

    http://www.cbpp.org/cms/index.cfm?fa=view&id=1258
    http://www.warresisters.org/pages/piechart.htm
    http://www.cbo.gov/

    Thursday, April 2, 2009 at 6:08 pm | Permalink
  5. I have felt for some time focusing the conversation on what are best practices for raising government revenues rather than who pays taxes is better for all.

    And then another conversation that focuses on where the collected revenues are best directed.

    To often the emphasis is on who should pay based on W-2 income and trust us where and how to spend.

    Can anyone suggest an example where any government is sited in a “best practices” example where the example is on the best part?

    Today is a Humanitas Sauvignon Blanc day – why I dropped in.

    Cheers,

    Tuesday, April 7, 2009 at 11:05 am | Permalink
  6. Joseph Dowdy wrote:

    While I’m certainly NOT for raising taxes, I am for the smartest and best practices.

    For one, the majority of spending of tax dollars goes to our military. As a veteran, I can tell you that we spend more on our military/DoD by a factor of nearly 10 times than any other country and the big shame is that you’d think that money would go to the soldiers, airmen, sailors and Marines, but they make less than minimum wage. How can we cut the overblown military spending on projects that can’t protect us from another 9/11? Stop the lobbyists who work for companies who are contracted to make billions (over 600 billion) on missile shields, stealth jets that are visible in rain/cloud-moisture, toilets that cost thousands, etc.

    Lobbyists, like tell-tale heart crook Jack Abramoff, are a big problem. Washington can’t seem to get rid of them.

    They rig the system. You’d think we, as a country, would embrace free enterprise, but the wealthiest Americans don’t hold it as a Holy Grail. Corporations in similar markets raise prices together like a rising tide where profits go up and up; consumers are asleep to the practice. Industries like energy where governments are expected to deliver or face public outcries are gamed for billions in profits. Companies take advantage of people’s weaknesses and general stupidity to rake in billions like cellphone companies that got away with charging people to receive calls even though landlines don’t incur a cost when receiving calls and when it comes to manipulating human behavior, cellphone companies know that the average person can not keep track of minutes any better than calories.

    Now, I’m not saying that corporations are evil, but some of the cats who run them are only out to squeeze the consumers for every dime they have like car dealership managers who orgasm every time that one of their employees rakes some poor family head over the coals for an overvalued car and an overinflated payment (and I know because I worked for one of them).

    No one but the government, we the people that is, have the power to curb runaway corporate profits where it’s clear that if they weren’t squeezing the customer and lavishing their executives that everyone would be happy except the greediest people in the company. They should be standing on the sidelines screaming that the company should be making so much more money and patted on the head so long as the company is making profits without doing it at the expense of those pursuing the American Dream (imagine someone in the 30′s trying to buy a house today when their apartment is getting smaller and smaller…).

    I agree that a government that is poorly managed can be just as bad and we’ve seen the lack of management from Clinton through Obama (including Bush) where they haven’t yet represented the people’s will when it comes to keeping our economy balanced and from spinning out of control. And some counties and states have gone bankrupt or are on the verge only because a few key people or a system of laws keeps prosperity at bay.

    However, if you look at when it was that Americans prospered the most, by percent of population, it was when there was lax credit and so that becomes a trap which will eventually close on those who don’t profit from it early.

    All we can do is focus on what made America from the beginning because it was good and pure. It was only through lobbying that America’s government, or any government, was ever corrupted. It was only through lax scrutiny that the consumer lost their hats in a whirlwind of slow or declining income and an increased cost on staples such as cellphones, health insurance payments, car payments, mortgages, addictive sweets/fats/sugars, etc.

    Our problem today isn’t taxation without representation, it’s inconsistency at most. Put out a flat tax that adjusts based on the budget with a cap of 25% (combined federal, state and local) on the individual and gut these enormously expensive programs that have very little soldier-on-the-field practicality. While you’re at it, give tax credits to families who take their seniors in as dependents so that SSI won’t implode under its own weight in ten years. And for Chreepst sake, give tax credits for everyone who is doing more than their fair share when it comes to leading our country to better fuel efficiency, ridesharing, commuting from home, generating their own electricity, recycling more and paving a way for a cleaner world.

    I hope this makes sense.

    Saturday, August 8, 2009 at 8:46 am | Permalink

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