Monday, February 16, 2009

Day of Really Bad Ideas, Part 1

1,900% beer tax hike.

More states will be proposing big tax hikes to make up for budget shortfalls this year--and it will be rare to see a state admit that smarter budgeting, cutting out programs that are not core to the business of running a state, and making a few tough choices might actually be preferable to creating a tougher business environment. The last thing government should be doing right now is siphoning money out of the private sector and making it harder for folks to do business with each other.

The “1,900%” part makes it sound a bit bigger than it really is, but it is a difference maker for a small business that already had a budget in place. A difference like that can make it harder to hire a new employee or buy an expensive piece of equipment that was already budgeted for this year or even in whether they can continue to offer decent health care to their employees. On the outside it looks like a small thing, but from the view of the person running the business it can be huge.

And that’s not even considering the potential for higher prices to depress the market for the products.

My guess is that small brewers could be facing a bad year, anyway, as consumers continue to realize that they need to be more price-conscious. Another little hit like this could drive some of them out of business or, at least, to consider a move to a more welcoming business climate.

Read the rest.


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