The proposal by Gov. Arnold Schwarzenegger would raise the tax on wine from 4 cents for a 750-milliliter bottle to 29.6 cents.
“It’s like shooting Charles Shaw in the eye. The profit margin is already so low we will have to raise the price,” said Franzia, chief executive of Bronco Wine Co., which owns the brand.
The excise tax, a levy on a specific good, often at the producer or supplier level and folded into the retail price, differs from a sales tax, which is paid directly by consumers.
But Franzia and the rest of California’s wine industry are fighting to derail the tax increase, which is part of Schwarzenegger’s plan to close California’s $41.6 billion budget gap. The wine industry’s main trade organization and other business groups have suggested any tax increases should not single out industries.