Beer culture

Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Charles Grassley (R-IA) held a hearing on Tuesday, May 12th on Financing Comprehensive Healthcare Reform. Senator Baucus invited healthcare policy experts, tax policy experts, and economists to join Finance Committee members to discuss the tax and savings options that the Committee should consider as it works to craft a healthcare reform bill. Senators and experts discussed a wide variety of ideas for looking for funding within and outside the healthcare system, including proposals by two of the witnesses to triple the beer tax and to find savings to pay for healthcare.

It is imperative that you call your member of Congress and your Senators, especially if they are on the Senate Finance Committee and weigh-in on the devastating impact ANY increase on the federal excise tax on beer would have on your business. The two links below can help you determine your member of Congress and Senators.

If you want to read more about the Senate Finance Committee round table on Tuesday, where three of the thirteen people called on to testify about how to pay for Obama’s $1.5 trillion universal health case initiative suggested that the excise tax on beer should be increased by between 50% and 400%, check out my other blog, the Brookston Beer Bulletin. The following two links can help you determine your member of Congress and Senators. And below is a table of the members of the Senate Finance Committee with a link to each member. Public comments can also be made at the committee’s website.

Directly and indirectly, the beer industry employs approximately 1.9 million Americans, paying them almost $62 billion in wages and benefits and generating more than $198 billion in economic output. Proposals to triple or quadruple the excise tax will have severe economic impacts on the industry. Just tripling the current beer tax to $20.25/proof gallon will cost the country jobs at a time when the national unemployment rate is the highest it has been since 1983. Beer Institute estimates that a 300% increase in the excise tax on beer will result in 179,000 lost jobs, $5.9 billion in lost wages, $18.9 billion in lost economic output, and $2.7 billion in lost federal, state, and local revenues from decreased production and consumption. The impacts of these tax increases may be even greater for small businesses as microbreweries and brewpubs will be hit with significantly larger tax bills. Many of these smaller companies may be forced to close.

An excise tax is designed to collect additional monies as volumes increase over time. The growth in beer industry volumes have added more than $800 million in additional federal revenue since 1991 when the beer excise tax was doubled. Excise taxes are hidden taxes on consumers who pay them in the final retail price of a product. In 2008, taxes on the beer industry at all levels of government added up to more than $41 billion dollars. The total tax burden of federal, state, and local taxes on beer are more than 41 percent of the retail price paid by consumers.

Approximately 50 percent of all beer purchased in the United States is by consumers with household incomes of $50,000 per year or less. That means the relative impact of beer excise taxes on households in the lowest income brackets is 6.5 times greater than those with the highest incomes.

The vast majority of our consumers are hardworking Americans who do not abuse alcohol products (Source: Harris Interactive, 2008). By levying an even higher tax on this segment of the population, Congress will make it even more difficult for them to enjoy a simple pleasure during these difficult economic times. These are exactly the people who should not be penalized in a misguided attempt to deter the small percentage of the public that abuses these products. Furthermore, during the fall 2008 campaigns, many candidates called for providing tax relief to this portion of the population. Brewers and beer importers agree, which is why they have supported measures such as the Brewers Excise and Economic Relief (B.E.E.R.) Act of 2009, which already has 174 cosponsors in the U.S. House of Representatives. The BEER Act (H.R. 836) hopes to return the federal beer excise tax back to its pre-1991 level of $9 per barrel for large brewers and $3.50 for small brewers.

American Craft Beer Week begins today and lasts until Sunday May 17. The week is described as “a national celebration highlighting the culture and contributions of craft beer.” Craft brewers want the week to inspire beer enthusiasts to declare their independence by supporting breweries that produce fewer than 2 million barrels of beer a year and are independently owned. During the week, special brewery tours, beer and food pairing events, special release craft beers and festivals will take place all across the U.S. It’s sponsored by the Brewers Association, a trade organization of small brewers based in Boulder, Colorado.

Originally held on a single day, it was changed to a week when it was recognized by the U.S. Congress, who declared the weekly holiday when they passed House Resolution 753 in 2006. You can find our more information at the ACBW website and also the ACBW Facebook page.

The efforts by neo-prohibitionists and cash-strapped state legislatures, like in Oregon and California, are not restricted to just the U.S. Across the pond in England, a similar tax hike is having a devastating effect on pubs, with over 2,000 closing since the taxes on beer were raised in 2008. There the beer industry launched a counter-offensive, creating an organization called Axe the Beer Tax. Recently, Axe the Beer Tax staged a protest outside the seat of Parliament at Westminster. Their anti-tax mascot, Mr. Pinty, and some friends, showed up to win support for undoing the beer tax and saving that most English of institutions, the pub.

The Publican takes up the story:

Industry efforts to stop further beer duty hikes in the Budget have been stepped up today with a parliamentary protest by a group of cartoon pint characters.

The Axe the Beer Tax — Save the Pub’s 6ft mascot Mr Pinty was joined by five other characters representing beer brands for a march around Westminster and PR opportunity.

As witnessed by The Publican, the group of five began their light-hearted protest at Parliament Square, as the Tamil protest continued on the other side of the square.

They then moved on to the Treasury, handing out campaign postcards to bemused passer-bys, before heading for a photocall near Downing Street.

More than 70,000 people have so far joined the campaign and 25,000 have lobbied their MP since November. As a result, over 202 MPs, from all political parties, have signed a parliamentary motion supporting the campaign.

In the last week more than 10,000 people have sent emails and texts to the chancellor, urging him to scrap beer tax rises, according to the campaign.

Mr Pinty said: “I am protesting with my friends today to make sure the Chancellor realises how horrible he is being to our lovely British pubs. The taxman already takes more than a third of a pint in tax and in the budget they want to take even more.

“Lots of Mr Pinty’s favourite pubs have been closing down since the Chancellor increased taxes last year. Mr Pinty just doesn’t understand why he continues to be so mean to him and his friends. We only want to make a living.”

Today is the late Michael Jackson’s birthday. He would have been 67 today, but passed away in August of 2006. To honor his memory and contribution to beer and whisky, a book was published today featuring new short works or essays by a baker’s dozen of beer and whisky writers. The new works were all donated by the authors and the proceeds of the book will be donated to the Parkinson’s Disease Society. I looks to be a worthwhile addition to your library. The authors are Stephen Beaumont, Dave Broom, Ian Buxton, John Hansell, Julie Johnson, Charles MacLean, Hans Offringa, F. Paul Pacult, Roger Protz, Lucy Saunders, Conrad Seidl, Carolyn Smagalski and Gavin D. Smith.

And it’s for a good cause. I’d say buy it on Amazon, but it’s not showing as being available. So look for it at your local bookstore soon. It would also make a lovely gift, don’t you think?

From the publisher’s website:

Editor Ian Buxton, who conceived the project, said “Michael Jackson dominated the world of both beer and whisky writing for two decades and was hugely influential in both ‘real ale’ and single malt whisky. A complete generation of writers has cause to be grateful to him, not to mention countless brewers and distillers. This new book honours that legacy.”