Editorial

Politicians should pull up a stool and work together on beer tax

May 29, 2015
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Brewers often seem able to settle their differences by sitting down together over a few beers. Politicians should take note.

Two proposals before legislators regarding tax reform for the brewing industry are more alike than dissimilar. Bickering over which is “better” ends up helping no one. The two proposals in Congress both ask for excise tax cuts to brewers.

Those cuts would be extremely helpful to brewers. Approximately 40 percent of what consumers pay for a beer heads toward taxes — not reinvestment into the business and local community. The tax cuts could lead directly to more than a billion dollars’ worth of economic activity in the first five years.

The current craft beer revolution is adding to cultural communities and economies across the nation as breweries open and expand at an almost exponential rate, despite the heavy tax burdens at the local, state and federal levels.

The fact that politicians recognize this revolution is encouraging, but arguing over the differences in the bills doesn’t do brewers any good and won’t help the industry as a whole.

The Craft BREW Act is aimed toward American microbreweries and only affects those that make fewer than 6 million barrels of beer a year. That’s high enough to include Boston Beer Co. and Yuengling Brewing Co. but excludes multinational corporations such as AB InBev and MillerCoors.

The Fair BEER Act supported by The Beer Institute would implement a graduated tax reform for brewers of all sizes, including importers.

Oddly enough, the Fair BEER Act would benefit small brewers more than the one supported by the craft beer trade group, the Brewers Association. It would eliminate excise taxes on brewers who produce less than 7,100 barrels a year — which today is 90 percent of all brewers in the United States.

The Craft BREW Act, meanwhile, would cut taxes on the first 60,000 barrels to $3.50 from the current $7 rate.

The main difference between the two Acts is the inclusion — or exclusion — of macrobrewers, which already pay nearly 80 percent of the industry’s excise taxes.

Governmental affairs and trademark differences, both of which are reported on in this week’s Business Journal, could lead to a deterioration of the current craft beer industry’s camaraderie, a major reason beer has become a hot trend.

The gap between craft and macro beers continues to grow and seems to lead straight to a stalemate in the case at hand. The stalemate likely would occur anyway, as both bills are bipartisan and that “seems to be a naughty word,” according to a local beverage manufacturer.

Certainly, a compromise should have been figured out prior to the competing bills’ introductions. Instead, brewers will be left drowning their tax bill sorrows while politicians haggle over “their” bills.

Come on, guys, sit down and hash it out over your favorite brews.

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