The Fiscal Cliff and an “innovative way” of tackling it…

Most of the world knows by now that the USA is coming up quickly – by December 31st – to a “Fiscal Cliff” whereby the Democrat and Republican parties will have to work out a financial approach to deal with the increasing debt and the financial status of the country for the future.

This is just one part of the ongoing discussion. A second issue where the date of December 31, 2012, is especially significant is that in 2001 – 2003 President George W. Bush lowered the tax rates on all Americans with the objective to raise public spending and create more jobs – goals which were really not met. These tax breaks are scheduled to expire on the above date unless Congress takes some action.

The Democrats want to use this opportunity to raise taxes on the wealthy, but let all the other tax cuts stand.  The Republicans want everyone to have a tax cut, including multi-billionaires.

At about the same time, Alcohol Justice, a strong advocacy organization working against all sorts of alcohol harm (formerly the Marin Institute), came out with a list of alcohol taxes that, if they were enacted, would significantly lower the U.S. deficit and contribute significantly to its financial status. The Alcohol Justice plan for “Alcohol Tax Scenarios To Address the Fiscal Cliff” makes three recommendations:

– Alcohol taxes should be indexed to inflation going forward.

– Alcohol taxes should be levied by proof gallon to equalize the rates among beer, wine and spirits.

– Increase the proof gallon tax to $24.16, and tax all alcoholic beverages at that rate, and increase the rate for inflation each year.

This is a great service on the part of Alcohol Justice to the American society and to the political system of the US. For two reasons:

1) They clearly illustrate how long ago it has been since taxes were raised in America.

2) They emphatically highlight how little the alcohol industry pays while the costs of alcohol harm to America is staggering – over $220 billion per year.

Yet, considering the present Congress, virtually all Republicans are committed to a strong policy of no new taxes. So it would be very difficult to believe the viability of the Alcohol Justice plan for raising all the alcohol taxes they have proposed.

Initially I believed – and hoped – that a deal would be struck by December 21, 2012 because this is the date the Congressional Winter Holiday Break begins. I thought – and hoped – that many Congress men and women would want to return to Washington after Christmas to continue haggling about the details of the final agreement.

However, it turns out that President Obama broke off his Christmas holiday to return to Washington for the ongoing quarrels. Time seems to be running out and I am hoping that all decision-makers have the best interest of the American people, especially children and youth, at heart. If that would be so, surely they’d also go with the proposal of Alcohol Justice to raise the taxes on alcohol.

For more reading:

The Press release by Alcohol Justice on the “$182.5 Billion Alcohol Tax Proposed to President Obama”

A brillinat TED talk on the Fiscal Cliff: “Adam Davidson: What we learned from teetering on the fiscal cliff

Editorial from the New York Times: “Fiscal Endgame

Opportunity for you to take action: Grass Roots Action Center