Subscribe here for free:

Cheaper Booze?



The tax code overhaul currently being considered by the U.S. Senate includes a $4.2 billion tax break for alcohol producers, especially small upstart craft breweries, and you might think that would mean cheaper prices for the consumer.

But, probably not.

Bob Pease, president of the Brewer's Association, told Congressional Quarterly in an email that since the bulk of the savings for breweries is focused on small operators, it probably wouldn't mean lower prices for consumers. But, he said, it will mean more jobs.

Under the plan, smaller breweries would get a steeper tax break than big breweries for the first 60,000 barrels they produce. For example, a brewery making 10,000 barrels a year would save about $35,000 annually.

“All of those breweries would take that savings and reinvest in their physical plant,”said Pease. "That reinvestment would allow those breweries to make more beer. When small and independent breweries produce more beer, they create more jobs and hire more workers."

The Beer Institute estimates the plan would save the overall industry $130 million a year. Large brewers like Anheuser-Busch InBev, which produces more than 100 million barrels of beer annually in the United States, would save around $12 million.

Wineries and distilleries would also benefit from the changes, which have prompted criticism and opposition from those concerned about the health impact of excessive drinking as the tax changes would come as per-capita alcohol consumption is climbing after after dramatic decreases in the 1990s, which followed all-time high consumption rates in the preceding decades​.

On average, every American age 14 and over consumed the equivalent of 2.32 gallons of ethanol in 2015. That’s 258 beers, 104 glasses of wine and 168 shots per person in a year, a slight decline from its peak in 2012, the equivalent of 2.34 gallons of ethanol per person.

According to the Centers for Disease Control and Prevention, from 2006 to 2010 there were on average each year 88,000 deaths from alcohol poisoning, traffic accidents or consumption-related chronic conditions. By comparison, drug overdose deaths are likely to be around 65,000 for 2016. The CDC estimates that in 2010, excessive drinking resulted in economic losses of $249 billion from lost workplace productivity and health care expenses.

Health experts argue that higher taxes help reduce alcohol abuse, just as higher taxes on cigarettes have been shown to reduce smoking. However, if this tax cut isn't really expected to reduce prices to the consumer much, if at all, what's the problem?

My concern is more about equity. Is it fair for millions of low and middle income taxpayers to face higher tax bills from this so-called "tax cut" legislation, which the Congressional Budget Office says will happen, while breweries get special tax breaks? To me, that's what's important here.

#TaxReform #Beer #Wine #Alcohol

  • Facebook Social Icon
  • Twitter Social Icon
  • Google+ Social Icon
  • Instagram Social Icon

Also Featured In

Not Fake News . Bob Gatty . 2719 Scarecrow Way, Myrtle Beach, SC . 301-908-1918. www.notfakenews.biz