Get Involved: Stop the Proposed Increase of Federal Beer Tax

June 8th, 2009 | Posted by Jay Brooks

Proposed Increase of Federal Excise Tax A Serious Threat to Small Brewers and Your Beer Choice — Contact Your Senators Now

We received the following action alert from Support Your Local Brewery, a national, grassroots partnership of beer enthusiasts, professional trade associations and brewers dedicated to supporting and protecting the legislative and regulatory interests of small, traditional and independent craft breweries. Most action alerts are state by state and this is the first national one I’ve seen. They’re asking for everyone to contact their U.S. Senator, but especially those of you living in the following states:

Arizona, Arkansas, Delaware, Florida, Idaho, Iowa, Kansas, Kentucky, Maine, Massachusetts, Michigan, Montana, Nevada, New Jersey, New Mexico, New York, North Dakota, Oregon, Texas, Utah, Washington, West Virginia and Wyoming.

The reason these states are so important is that’s where the Senate Finance Committee members are from, so it’s most important that they hear from constituents in their home states.

Here’s the information from the action alert.

Small brewers are facing an imminent and extremely serious threat to their businesses. The consequences of remaining silent have the very real potential of reducing your choice of beer and dramatically increasing the price of any beer that you purchase.

The Senate Finance Committee in Washington, DC is currently considering a proposal to increase and equalize the excise tax for alcohol beverages as part of healthcare reform deliberations. This proposal would triple the excise tax for 4.5% ABV beer and impose even higher excise tax rates for higher ABV beers.

If such a proposal becomes reality, there is no question that many small brewery businesses will suffer, some will close and consumers will face higher prices and diminished choice in the marketplace.
The Brewers Association brewery members and leadership have been actively engaged in building the case against an excise tax increase, recently submitting a letter to the Committee outlining our opposition.

We need you to speak out now. Today or tomorrow at the latest.

If your Senators are not members of that committee, ask them to contact their Finance Committee colleagues and express their opposition to this proposal moving forward.

Your ask of them is simple:

Oppose the Tax Increase. Let them know that you oppose, in the strongest possible terms, raising the federal excise tax on beer because of the serious consequences it would have on small brewers and the craft beer they brew. Additional talking points appear below.

Once again: If one of your Senators sits on the Senate Finance Committee (roster of and links to members below), urge them to oppose this proposal in committee deliberations.

If your Senators are not members of that committee, ask them to contact their Finance Committee colleagues and express their opposition to this proposal moving forward.

Take Action: Call and/or email your Senators’ Washington or district offices and make your personal case against this massive excise tax increase.

 

DEMOCRATS REPUBLICANS
MAX BAUCUS, MT
JOHN D. ROCKEFELLER IV, WV
KENT CONRAD, ND
JEFF BINGAMAN, NM
JOHN F. KERRY, MA
BLANCHE L. LINCOLN, AR
RON WYDEN, OR
CHARLES E. SCHUMER, NY
DEBBIE STABENOW, MI
MARIA CANTWELL, WA
BILL NELSON, FL
ROBERT MENENDEZ, NJ
THOMAS CARPER, DE

CHUCK GRASSLEY, IA
ORRIN G. HATCH, UT
OLYMPIA J. SNOWE, ME
JON KYL, AZ
JIM BUNNING, KY
MIKE CRAPO, ID
PAT ROBERTS, KS
JOHN ENSIGN, NV
MIKE ENZI, WY
JOHN CORNYN, TX

ISSUES OF IMPORTANCE TO SMALL BREWERS — EXCISE TAXES

Small brewers are small Main street businesses, typically employing 10 to 50 employees.

Small brewers represent only 4% of the entire U.S. beer market by volume, with 95% of them being very small businesses (producing 15,000 barrels or less per year).

We strongly oppose proposals to increase the excise tax on beer.

  • Proposals to increase and equalize the tax among all types of alcohol will tax small brewers at the highest rates because their specialty, gourmet and innovative beers typically have higher alcohol contents.
  • Brewers already pay a disproportionately higher share of taxes compared with other products – federal, state and local taxes represent over 40% of the retail price for beer while the same taxes equal nearly 24% of the price for all other purchases.

Higher taxes will worsen the economic recession – resulting in less competitive products, reduced sales and revenues, lost jobs and, for some small brewers, business closures.

  • $1 per case excise tax increase will typically cost the consumer at least $1.69 due to successive mark-ups as the case moves from brewer to wholesaler to retailer.
  • Many small brewers are struggling to deal with the consequences of the 2008 spike in ingredient and operational costs.

If you want some background on what’s going on with this, here’s where it started with a Senate Finance Committee roundtable in mid-May which then escalated to a written proposal on May 20. This increase is in addition to state excise taxes that breweries have to pay. There’s also additional information at Don’t Tax Our Beer and the Brewers Association’s Excise Tax Resources page.

If you care about the beer you drink and the many small breweries that make it, please take a few minutes out of your day to help keep it affordable and also keep some of them from possibly going out of business. Please reach out to your elected official in the U.S. Senate. They’re supposed to work for you, after all, let them know how you feel.

 

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8 Responses to “Get Involved: Stop the Proposed Increase of Federal Beer Tax”

  1. Ale Evangelist Says:

    Dammit! All raising taxes does is kills prosperity. Whether that’s taking my money through my purchases, or based on my income, it does not stimulate ANYTHING. What’s more, as pointed out in this article, it’s self-defeating. Decreasing alcohol consumption and torpedoing small businesses will have the net effect of lessening revenue more than anything else.

    However, I do NOT support applying new taxes to soda, trans-fats, or anything else that Big Brother says is harmful. How about we reduce taxes AND the size of the government, and let people who produce wonderful things (like beer) stimulate this economy the way the Founders intended.

  2. Gogg Boggs Says:

    Somehow we need to pay to support our troops in Iraq. I don’t like taxes any more than anyone but when are we going to take ×personal× responsibilty and understand that we must accept some sacrifices and financially support the good men and women of our armed forces.

  3. tranehead Says:

    We need to support those troops by bringing them home Gogg Boggs. Then we can ALL have a beer together that has NOT been taxed to pay for some little pet project.

  4. Ale Evangelist Says:

    Oh, and here’s another question. What about all the tax dollars we ALREADY give them??? You don’t think any of that is being wasted?? So every time the government runs out of money, you’re ok with them just asking for more?

    Bullcrap.

  5. Good Burp Says:

    When I first read this, I was shocked. It has been an issue flying under the radar locally. Last week was the first time I heard about it on the radio. I hope it falls apart. But I still plan to do what I can to support the breweries.
    Keep on fighting the good fight.

  6. Steve Marler Says:

    Here is an example letter I sent. You can use it as a template. It is Virginia specific.

    Dear Senator (fill in last name)
    I am writing you in regards to the proposed increase in the excise tax on beer. If such a proposal becomes reality, there is no question that many small brewery businesses will suffer, some will close and consumers will face higher prices and diminished choice in the marketplace. This is not the solution for funding health care reform. I am against this proposed increase and I hope that you are also.
    Proposals to increase and equalize the tax among all types of alcohol will tax small brewers at the highest rates because their specialty, gourmet and innovative beers typically have higher alcohol contents. Brewers already pay a disproportionately higher share of taxes compared with other products – federal, state and local taxes represent over 40% of the retail price for beer while the same taxes equal nearly 24% of the price for all other purchases.
    Higher taxes will worsen the economic recession – resulting in less competitive products, reduced sales and revenues, lost jobs and, for some small brewers, business closures.
    • $1 per case excise tax increase will typically cost the consumer at least $1.69 due to successive mark-ups as the case moves from brewer to wholesaler to retailer.
    • Many small brewers are struggling to deal with the consequences of the 2008 spike in ingredient and operational costs.
    Small brewers are small Main Street businesses, typically employing 10 to 50 employees. Small brewers represent only 4% of the entire U.S. beer market by volume, with 95% of them being very small businesses (producing 15,000 barrels or less per year). The State of Virginia has many small brewers, and that number is increasing. A Virginia beer trail has just been established, and this trail will spur tourism. Such a tax would jeopardize this positive trend. Let us not forget, as we hear all the time during political campaigns, small business is the engine of our economy.
    Please contact your colleagues on the Finance Committee and express your opposition to this proposal moving forward.

    Thank you for your support on this issue.

    Your humble constituent,
    (your name)

  7. Uncle B Says:

    Canadian here, the piss Americans call beer isn’t worthy of a tax from a reputable government! Goddamn! You are sinking fast Yankee doodle! goddamn! Make your own, from Canadian beerkits, or even Australian kits! Some are available from Germany and Britain too! but drink real beer, not that chemical piss they sell you at your stores, and pay no goddamned tax at all! Web-sites are full of recipes to make beer right from barley! Very cheap, very labor intensive, but no tax at all!

  8. BigSteve Says:

    Beer, soda, bottled water should all have a tax, an equal tax to pay for clean up of the mess left by partakers. Look at our highways and parks and see the mess left by people just throwing empty containers along the sides. Broken glass and crushed plastic littering the most beautiful country in the world. All alcoholic beverages should have an additional tax to pay for the damage done by drunks. A “proof” based tax is as fair as it can be. Suppose our wasted military budget (we haven’t “won” a war since 1945) were funded entirely by a beverage tax instead of the fascist plan just to keep borrowing from China….? Tie military waste to public consumption…. Then we could brag that we were having just “one more beer for Uncle Sam”….