News & Media
Conservative and liberals agree: Keeping excise tax rates low for brewers and beer importers makes sense
by Jim McGreevy
Cable news likes to tell us that America is polarized, divided into camps of Republicans versus Democrats. Pundits feed into a narrative that there is no issue that unites people of different political persuasions.
However, when it comes to our nation’s beer industry, Democratic, Republican, and Independent voters as well as right- and left-leaning organizations, agree that policymakers should not raise taxes on our nation’s brewers and beer importers.
The Tax Cuts and Jobs Act, passed by Congress in December 2017, provided a temporary reduction in federal excise taxes for all of our nation’s brewers and beer importers.
This law provides much-needed relief for America’s brewers and beer importers, an industry that supports more than 2.1 million American jobs and generates more than $328 billion in economic activity.
After a one year extension at the end of 2019, the changes in the Tax Cuts and Jobs Act are set to expire on December 31, 2020. Without Congressional action, America’s brewers and beer importers will face a $154 million annual tax increase. Unlike other taxes which don’t come due until the end of the calendar year, excise taxes on brewers are levied throughout the year, making a January 1, 2021 increase particularly painful for an industry that has faced significant headwinds due to COVID-19.
Center Forward, a policy center that has “its roots with moderate Democrats,” recently published an article warning about the negative consequences of raising excise taxes on alcohol, stating, “excise taxes are passed on to the consumer, often disproportionately affecting lower income and underserved communities.”
A warning against increasing excise taxes on brewers and beer importers was recently echoed by the National Taxpayers Union, whose mission is “to achieve favorable policy outcomes using the most effective pro-taxpayer team.” NTU wrote about the benefits of maintaining the lower the federal excise tax rate on brewers and beer importers because “businesses will know what to expect and invest in growth that will be sustained over the long term.”
Recent polling by the Beer Institute found support for keeping the current federal excise tax rates permanent to be widespread across the political spectrum: 66 percent of Republican voters, 64 percent of Democratic voters, and 58 percent of Independent voters support Congress making federal excise tax relief permanent for all brewers and beer importers.
For centuries, beer has brought people together, whether coworkers gathering for an after-work happy hour or Americans of different political parties. As more than 651,000 jobs that depend on the beer industry will be lost by the end of the year because the COVID-19 pandemic, tax increases on brewers and beer importers would make it even more difficult for these businesses. The beer industry is working to overcome a $22 billion drop in retail beer sales brought on from the necessary closure of bars, restaurants, and sports stadiums because of the pandemic. Tax increases are just not the right answer.
As Congress looks for ways to highlight the issues where they find agreement, ensuring our nation’s brewers and beer importers don’t see a tax increase is something most Americans would gladly toast.
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