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Watching President Donald Trump’s State of the Union, it struck me that his rhetoric is eerily similar to that of freshman state Representative Jamie Jackson, a Democrat representing House district 41.
Trump argues that tariffs aren’t taxes and that tariffs only harm foreign corporations and other countries, not American consumers, who have seen skyrocketing prices. Similarly, Representive Jackson said in a stakeholder meeting that HB26-1271 is merely a “fee,” not a tax, that would increase state revenue from alcohol sales by at least 60 percent. And that the bill is about combating corporate greed, without acknowledging local businesses cannot possibly absorb any significant cost increase without raising prices on consumers already deeply concerned about our affordability crisis.
Let’s be clear, the HB26-1271 enterprise “fee” legislation is a tax, just like tariffs are taxes by another name.
I run numerous metro-area pubs and restaurants and can tell you, no matter what you call it, this increase will get passed along to my customers. And we’re not talking pennies per pint, because that’s not how alcohol pricing works and not how the three-tier system in which alcohol is sold works.
Every time an input cost goes up – and taxes are an input cost – the price producers must charge also goes up. Alcohol also goes through a three-tier system (from manufacturer, to wholesaler, to retailer) before reaching consumers. Each tier will need to cover increased costs from this tax proposal, adding additional multiples to their cost. Alcohol prices, like all other items sold at retail, are not priced incrementally by the pennies; instead, prices are rounded and typically go up by $0.50 or $1 increments. When is the last time you ordered a pint of beer at a bar for $12? It’s coming soon with incremental “fee” policies like this.
Ultimately, each business will have to determine for itself if and how it can absorb this massive tax increase. Most will have to raise prices on hard-working Coloradans, as has been the case with tariffs. Regardless, this tax increase means even less profit for our businesses already struggling with razor-thin margins. Many operators are already struggling with unsustainable costs, as is evident with the unprecedented level of brewery, pub, bar and restaurant closures the past few years.
According to Colorado’s Liquor Enforcement Division, alcohol sales are significantly down across our state. Businesses like mine that rely on those sales to survive cannot withstand this additional blow. What business plans for 60 percent cost increases? And worse yet, there is a second bill, HB26-1301, that adds another 100 percent tax increase on alcohol – but at least that bill’s author is being honest and calling it a tax increase rather than trying to go around the Taxpayer Bill of Rights. Should both bills pass this legislative session, it would mean a 160 percent tax increase on our local alcohol businesses of all sizes, which employ thousands of Coloradans.
Democrats have made it clear that with this mid-term election, they are running on affordability and against Trump’s policies that have contributed to unaffordability. Alcohol tax and “fee” increases will lead to higher prices for Coloradans just looking to unwind after a long day. And as personal budgets get squeezed, fewer will go out and support our local economy and job creators, leaving the state with fewer revenue generators paying taxes.
If Representative Jackson truly cares about affordability, Colorado’s workers and our local economy, she will stop aligning herself with Trump’s tariff logic and shut down HB26-1271.
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