The Schlafly Beer Employee Blog

April 1, 2014

Top Fermentation - April 2014

tombioweb

The Monthly Editorial Blog By Schlafly Beer Co-Founder Tom Schlafly

Let me tell you how it will be.
There’s one for you, nineteen for me,
‘Cause I’m the tax man, yeah, I’m the tax man.

Should five percent appear too small,
Be thankful I don’t take it all,
‘Cause I’m the tax man, yeah, I’m the tax man.

These memorable lyrics by the Beatles have undoubtedly been running through the minds of many alert readers (ARs) who were around in 1966 as they’ve struggled to file their federal and state income tax returns by April 15th.

Don’t tax you. Don’t tax me.
Tax that fellow behind the tree.

This couplet was famously and frequently used by Senator Russell B. Long of Louisiana to describe tax reform. In essence, most people think that tax reform consists of lowering their own taxes and raising someone else’s. Who can forget Mitt Romney’s claim that 47 percent of Americans don’t pay income tax? Whether the statement was correct or not, as the Beatles accurately pointed out, the tax man can find lots of other things to tax in addition to one’s income:

If you drive a car, I’ll tax the street.
If you try to sit, I’ll tax your seat.
If you get too cold, I’ll tax the heat.
If you take a walk, I’ll tax your feet.

Mitt Romney, a teetotaler, is among the 33 percent of American adults who do not pay taxes on alcoholic beverages. Among the two thirds of the adult population who do pay these taxes, the vast majority are beer drinkers. According to the Beer Institute, taxes account for approximately 40 percent of what is spent on beer, making taxes the most expensive ingredient in a bottle of beer. Unlike the income taxes purportedly not paid by 47 percent of the population, the beer taxes not paid by Romney and other non-drinkers are highly regressive.

The power to tax involves the power to destroy.

alcaponemugshotcpd-2Nabbed by the Tax Man

This enduring wisdom was articulated by Chief Justice John Marshall 195 years ago in his opinion in McCulloch v. Maryland. Ironically, Marshall had been appointed Chief Justice by President John Adams, whose Federalist Party had lost the presidential election of 1800 largely because it was perceived as the party of high taxes. As for the truth of Marshall’s characterization of the taxing power, it’s worth remembering that it was the tax man who destroyed the career of Al Capone and sent him to the newly opened Alcatraz. It’s also worth remembering that many advocates of so-called “sin taxes” want to discourage beer drinking by raising the tax on beer to prohibitively high levels that would risk destroying the livelihoods of hundreds of thousands of workers in the process.

ARs will recall that for many years I’ve talked about forming a Beer Drinkers Party to protect beer drinkers from excessive taxes and burdensome regulations. These same ARs are also well aware that I’ve never gotten around to doing anything about organizing such a party. I’m now beginning to think that starting such a party might not be such a good idea after all. Having observed what the IRS has done to anyone associated with the Tea Party, I’m worried that its wrath might be redirected at a group with a similar-sounding name like Beer Party.

Most ARs are familiar with Lois Lerner, the now-retired IRS official who may or may not have singled out the Tea Party for harassment. When testifying before Congress Ms. Lerner somewhat incongruously said, “I have not broken any laws” before invoking the Fifth Amendment, in essence saying that telling the truth would force her to admit that she had in fact broken the law.

It appears that back in 1966 the Beatles got it partially right. We need to worry not only about the tax man, but also the tax woman.