We’re just over three years shy of the 100-year anniversary of the beginning of Prohibition (the 18th Amendment went into effect Jan. 16, 1920), and to this day we’re stuck dealing with high taxes and convoluted (or even outright stupid) regulations that continue to make alcohol of all kinds in the United States more expensive, less accessible, less tasty, less innovative, and even less safe.
Even as beer industry lobbyists hypocritically push for similar burdens to be placed on the burgeoning legal marijuana industry, Congress is set to provide a little relief on the alcohol front, as Kevin R. Kosar at The American Conservative reports:
- Lower the federal excise tax to $3.50 per barrel on the first 60,000 barrels for domestic brewers who make fewer than 2 million barrels per year;
- Reduce the federal excise tax to $16 per barrel on the first 6 million barrels for all other brewers and all beer importers;
- Maintain the current $18-per-barrel rate for brewers who produce more than 6 million barrels;
- Lower the tax on liquor for the first 100,000 gallons produced from $13.50 to $2.70 per gallon; and
- Exempt home distillers from federal taxes.
The bill also would enact several other reforms, including reducing some tax-related reporting requirements and defining “cider” so that fizzier versions are not subject to pricey sparkling-wine taxes (cider is taxed at 22.6 cents per gallon and bubbly is taxed at $3.40 per gallon).
Those 51 supporting senators are all cosponsors, which means there are likely even more senators who would be willing to vote for the bill (Sen. Rand Paul, for instance, is not on the list, and it is difficult to believe he’d vote against lowering beer taxes). Also, it’s a pretty bipartisan bunch, which means this legislation is blessedly safe from election-year rancor, and the House of Representatives companion bill similarly has more than enough votes to pass.
Unfortunately, as Kosar explains, the bill doesn’t go far enough, leaving in place an irrational system of taxing different drinks unequally. Fizzy wine, for instance, gets triple (!!) the tax of flat.
Of more immediate practical concern, even the reforms this bill does make would cut into federal revenue, which means it may not survive Congressional Budget Office analysis unless Congress can find another way to make up the cash.
The best case scenario — budget complaints aside — would be, as Kosar argues, to nix all alcohol taxes or, if allowing Americans to drink beer without giving Uncle Sam his cut is too radical, coming up with a system less obviously open to unfair, crony capitalist manipulation.
“Perhaps,” he concludes, “one day a brave legislator will propose one of these reforms. The tax man may hate it, but the thirsty electorate will cheer.”