Beer Industry Tax Break Bill Wins Majority Support in House

Legislation that would cut beer taxes charged to brewers has garnered 218 cosponsors in the U.S. House of Representatives, enough to get the measure passed in the 435-member House, according to the Beer Institute.

The bill, H.R. 836, would roll back the federal excise tax on beer to 1991 levels, cutting taxes on big breweries like Anheuser-Busch and MillerCoors from $18 per barrel of beer to $9 per barrel and the tax on smaller breweries from $7 per barrel to $3.50 per barrel.

“This relief will preserve American jobs and help breweries — large and small — remain competitive now and in the future,” said Beer Institute President Jeff Becker when the measure was introduced back in February. The Beer Institute — traditionally seen as the voice of the nation’s large breweries — has joined forces with the Brewers Association, a trade group for small and independent brewers, to support the tax rollback.

Is my Representative a co-sponsor? Check the list (PDF, 32 KB)

“Many small breweries are family run operations situated in small towns and communities across the country,” said Charlie Papazian, president of the Brewers Association. “These are exactly the types of small businesses that provide important local jobs and need tax relief in this struggling economy.”

However, the industry’s arguments for the tax rollback rang hollow for David Rosenbloom, Ph.D., president and CEO of The National Center on Addiction and Substance Abuse at Columbia University. “This attempt to rob the public purse is particularly cynical because Anheuser-Busch and MillerCoors, who together sell more than 70 percent of the beer in the U.S., recently announced major price increases,” said Rosenbloom. “This tax cut will not ’save jobs’ or help consumers. It will likely be used to pay down the huge debts incurred when foreign companies bought the major American breweries. Congress should be raising alcohol taxes to help lower medical costs and pay for health reform. The idea of cutting alcohol taxes is shameful.”  

The Center for Science in the Public Interest says that the federal tax rate on alcohol has effectively fallen 40 percent due to inflation since 1991, and that increasing taxes on alcoholic beverages could raise anywhere from $60 to $110 billion for healthcare reform.

The tax-cut bill, dubbed the Brewers Excise and Economic Relief (BEER) Act of 2009, is sponsored by Reps. Earl Pomeroy of North Dakota (D-.N.D.) and Tom Latham (R-Iowa). Companion legislation, S-1058, was introduced in the Senate by Sen. Mark Udall (D-Colo.) and cosponsored by Sens. Michael Bennet (D-Colo.), Kit Bond (R-Mo.), Saxby Chambliss (R-Ga.), Mike Crapo (R-Idaho), Jon Tester (D-Mont.), and David Vitter (R-La.). The House bill has been referred to the Committee on Ways and Means.

Michael Scippa, advocacy director of the Marin Institute, said that the addiction field should not be overly alarmed by the legislation. “Our sources on [Capitol] Hill tell us that this will go nowhere this year,” said Scippa, who said similar proposals are floated during each session of Congress. “It’s an excuse to keep the Big Alcohol lobbyists engaged and working while the producers pick up the tab.” 

Scippa added that Marin’s Charge for Harm movement, which seeks increases in state and local alcohol taxes to mitigate the harm caused by drinking, is picking up momentum. “Big Alcohol’s eyes should be on the train wreck heading their way at the state and local levels,” he warned. 

The BEER Act – Chutzpah & Hypocrisy Read Joseph A. Califano, Jr.’s post on the Chairman’s Corner Blog