Arnold Schwarznegger in "The Wrath Of Grapes"

[lame54]

http://www.latimes.com/business/la-fi-chuck21-2009jan21,0,4418335.story

The governor is proposing to increase California's wine levy.
By Jerry Hirsch > > >
January 21, 2009
Is this the end of Two Buck Chuck?

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.

The proposal by Gov. Arnold Schwarzenegger would raise the tax on wine to 29.6 cents for a 750-milliliter bottle from 4 cents.

"It's like shooting Charles Shaw in the eye," said Franzia, chief executive of Bronco Wine Co., which owns the brand. The profit margin is already so low we will have to raise the price."

Consumers have differing opinions on the excise tax, which is a levy on a specific good, often at the producer or supplier level and folded into the retail price, rather than a sales tax, which is paid directly by consumers.

But Franzia and the rest of California's wine industry are fighting furiously to derail the tax increase, which is part of Schwarzenegger's plan to close California's budget gap, estimated to reach $41.6 billion by the middle of next year

http://www.youtube.com/watch?v=JE8cVV6NGxM