Beer Tax Hike to Balance the Budget

Some Democratic state lawmakers want to raise taxes on beer to help solve the state's budget woes. The tax on beer would hit the so-called “Joe Six-Pack” consumer, but shelter products from small, in-state breweries that sell a higher-priced brew to a more well-heeled clientele.

That's the highlight of a new tax proposal from the Senate, which has been negotiating a state tax package with the House and Governor. The newest Senate idea would increase state taxes by 50 cents per gallon on mass-market beers. Microbrews would be exempt.

Their plan would hike existing state taxes by 50 cents per gallon on mass-market beers. With existing taxes, that would mean people will pay 43 cents in taxes per six packs, Senate Democrats said.

It also would extend the sales tax to candy, gum and bottled water, and raise the state sales tax by one-tenth of a penny. That would raise about $200 million - the final disputed piece of a roughly $800 million tax package that Democratic leaders want to help patch the state budget. Lawmakers are in a special session to bridge a $2.8 billion budget deficit through June 2011.