US: California winemakers slam tax hike plan
California winemakers are lobbying against a proposed six-fold increase in wine tax, set down by state governor Arnold Schwarzenegger.
Under the plan, announced before Christmas, excise tax on wine in California would rise by 640%, or from US$0.20 per gallon to $1.40 per gallon.
California's Wine Institute has said that it was "stunned" by the proposal and that the rise could cause "great injury" to the state's US$52bn wine industry, which produces 90% of US wine.
Institute CEO Robert Koch told governor Schwarzenegger in a letter, seen by just-drinks this week: "We understand the dire situation that the State of California is facing and recognize California's budget shortfall and the Administration's desire to generate revenue, but we strenuously object to the singling out of our industry to bear more than our fair share of the burden."
He added: "Raising the excise tax on wine would depress wine sales, eliminate jobs and result in winegrape acreage being pulled out of production."
Several US states are proposing tax rises on alcoholic drinks in their budgets for 2009-10, a trend the industry believes is being fuelled by a need to paper over cracks in budget deficits.
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