California Liquor Tax Increase Proposal May End “Two Buck Chuck”
February 2, 2009
Gov. Arnold Schwarzenegger’s “nickel a drink” liquor tax increase proposal (which is a hefty increase; the tax on wine would go from 4 cents to 29.6 cents), has some worried:
A proposal to raise the state tax on wine to a level more than six times higher to help close California’s giant budget deficit would kill the $1.99 price for Charles Shaw wine, said Fred Franzia, who created the famous label sold by the Trader Joe’s grocery chain.
Charles Shaw, of course, is the formal name for the California wines sold since 2002 that are now widely known by their nickname Two Buck Chuck.[…]
Franzia said he wasn’t sure what the new price would be — it would have to be worked out with retail partner Trader Joe’s — but $2.29 or $2.49 Chuck would not be a surprise, according to industry analysts.
Trader Joe’s, which introduced the wine seven years ago and has never raised the price, declined to say whether it had a stand on the proposed tax and would not talk about its plans for the wine.
Charles Shaw fans are divided on whether the tax is a good idea.
“Two Buck Chuck is a nice wine, and the price is wonderful. You can drink it or use for cooking, and it’s not very expensive,” Jim Elsten of Long Beach said while shopping at a Trader Joe’s in Long Beach last week. “I think it would still be a good deal at $2.29 or $2.49. Wine is a luxury, and I don’t see an extra tax as a problem.”
But Huntington Beach resident Jamie Kaiser questions the wisdom of placing an extra tax on wine.
“I would still buy it,” Kaiser said as she loaded a case of Charles Shaw Chardonnay into her car, “but it seems like they are just taxing everything now and nothing with the state budget ever changes.”
The full Los Angeles Times article here.
Was this page helpful to you?
The Tax Foundation works hard to provide insightful tax policy analysis. Our work depends on support from members of the public like you. Would you consider contributing to our work?Contribute to the Tax Foundation
Let us know how we can better serve you!
We work hard to make our analysis as useful as possible. Would you consider telling us more about how we can do better?Give Us Feedback