Roll Back the Tax
Feb 10, 2009 - The Beer Institute and the Brewers Association today applauded members of the United States House of Representatives for the introduction of H.R. 836 the Brewers Excise and Economic Relief (BEER) Act, which effectively returns the federal beer excise tax back to its pre-1991 level of $9 per barrel.
"There is strong, industry-wide support for this legislation, and we thank Congress for its bipartisan effort to institute tax fairness for one of the most productive sectors of the American economy," said Tom Long, President and Chief Commercial Officer of MillerCoors, and Chairman of the Beer Institute. "We commend Reps. Earl Pomeroy (D-ND) and Tom Latham (R-IA) for their leadership on this important issue, and we urge Congress to help provide relief to low- and middle-income families and businesses in America's brewing community by passing this legislation as quickly as possible."
T here are over 2,053 brewing companies in the United States operated by national brewers, regional brewers, regional craft brewers, microbrewers, and brewpubs. These job-creating businesses are in every state in the nation. In fact, a majority of Americans live within 10 miles of a brewery. In addition to reducing the tax burden on large brewers and beer importers the legislation introduced today provides specific relief to small brewers by reducing their tax burden from $7.00 to $3.50 per barrel.
"This type of tax relief can act as a stimulus to America's small breweries," said Rich Doyle, cofounder of Harpoon Brewery and Chairman of the Brewers Association. "While our industry has been able to remain successful in the recent past, we've faced raw material cost increases that have reduced our margins and severely challenged our bottom line. This measure would go a long way toward sustaining our businesses and our employees, benefiting local communities in all 50 states."
The 1991 doubling of the federal excise tax remains the only so-called "luxury tax" still in place. All of the taxes on luxury products such as yachts and jewelry that were increased that same year have since been repealed due to the devastating consequences they had on jobs, the economy and the industries impacted. Today, more than 40 percent of the retail price of beer is comprised of various taxes, and beer taxes at all levels of government add up to more than $36 billion annually.
"At a time when the economy is struggling and manufacturing jobs are being lost, America's brewers, beer importers and suppliers stand out as a rare positive story of local businesses committed to good-paying jobs and contributing billions of dollars in economic activity," said Jeff Becker, President of the Beer Institute. "This relief will preserve American jobs and help breweries -large and small- remain competitive now and in the future."
Directly and indirectly, the beer industry contributes approximately $190 billion annually to the U.S. economy and provides more than 1.7 million jobs with wages and benefits of nearly $55 billion.
"Many small breweries are family-run operations situated in small towns and communities across the country," added 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."
Approximately 50 percent of all beer purchased in the United States is by consumers with household income 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.
Companion legislation is expected to be introduced in the United States Senate in the coming weeks.