Federal brewers tax cut proposal reintroduced

Legislation to cut in half what craft brewers pay in federal excise tax has been reintroduced in both houses of Congress. 

Craft brewers now pay $7 per barrel on the first 60,0000 barrels they produce and $18 for every barrel on top of that. 

The proposed Small Brewer Reinvestment and Expanding Workforce Act would halve the first tier of the production tax and create a second tier of $16 levied on production from 61,000 to 2 million barrels. 

The tax after 2 million barrels would remain $18.

Proposals to cut excise taxes were last introduced in 2011 for the 112th Congress, but the legislation stalled. (There have been several instances of similar legislation proposed in Congress in the past.)

The legislation was reintroduced in the House of Representatives three months ago. Last week, the Colorado-based Brewers Association, the trade group representing the craft brewing industry, announced companion legislation had subsequently been introduced in the Senate by Ben Cardin, a Maryland Democrat, and Susan Collins, a Republican from Maine. 

New Jersey Sen. Robert Menendez posted a statement on his website that he is a co-sponsor of the bill.

Nationally, the craft brewing industry employ more than 108,000 full- and part-time workers, generating more than $3 billion in wages and benefits, while contributing $2.3 billion in business, personal and consumption taxes.

Supporters of the legislation say lowering the tax rate would enable the nation's 2,400 craft production brewers and brewpubs to hang on to an additional $60 million annually, money that could be reinvested in their brewery operations to grow them regionally or put them on a national footing. In the process, supporters say, brewers would likely be creating jobs. 

The bill numbers are H.R. 494 and S. 917.

Rapid response ...

As in yours is needed. This missive from the Brewers Association tumbled into the email queue today.

Like we have said, the battle has been joined, and the Brewers Association is conscripting craft beer drinkers to act like a militia and speak out, state by state, against higher excise taxes by writing their lawmakers on Capitol Hill.

New Jersey's own Bob Menendez is on the Senate Finance Committee. One more time, here's his email. And the blue graphic shows addresses for his New Jersey and DC offices.

The best approach is a two-pronged one, meaning don't just email, but send the same comments via conventional mail as well. Also, when you write, cite. Pull information from the Brewers Association's arguments and point out that higher federal taxes will hurt New Jersey craft brewers, who are a source of jobs and state and local taxes, regardless of how many jobs or however much those taxes paid at home are.

It's also worth pointing out – as we have before – that beer, wine and liquor* have been paying Uncle Sam's bills for several decades. It would be unfair and too easy for Congress to tap that source again. But the unfortunate stigma that beer, wine and liquor have attached to them make them the easy – even vulnerable – target. DUI, underage drinking and alcoholism are not solved through higher taxes (nor should any thinking person accept those as reasons to fund healthcare reforms so long as cigarettes are a commercially available product in this country).

If you're over 45, you probably remember when soft drinks came, not in Big Gulps and 20-ounce containers, but in 12-ounce bottles (or even 6 and 10 ounces from vending machines!) and that fast food was a sometimes food, served in modest portions, and not an everyday food. And it should mean something to healthcare reformers, Capitol Hill and the Obama administration that five years ago McDonald's, to its credit, dumped its Super Size menu, thanks, in no small part, to blow-back from those outsized portions making outsized Americans. Oversized sodas and fatty, prepared or prepackaged foods own a piece of the erosion of the nation's overall health and their industries should be asked thusly to share a tax burden.



*Awhile back, Pennsylvania beer writer Lew Bryson put forth the idea that calling beer, wine and liquor alcoholic beverages is an unfortunate choice of words, unfairly tying them to negative connotations of alcoholics and alcoholism. (Lew didn't pontificate; he just pointed out his preference to not phrase references to the beverages in that way.) We share his point of view: Hence, beer, wine and liquor.