The Democratically controlled Senate Finance committee is looking for ways to offset the enormous costs of what could become the “Obama-care” national health care plan. Whatever your political stance is on the core issue of health care nationalization, someone is going to have to pay the piper. Printing money and taxing your employer-provided health care benefits are a few ideas being kicked around (but I thought Mr. “O” dogged Mr. McCain for suggesting those ideas in the debates? Oh well, I am sure our trained skeptics in the Press will follow-up on that. Maybe after they are done drooling over Mr. “O”…). One particularly punitive plan will squarely target the alcoholic beverage industry with the largest increases falling on the backs of craft brewers. This new excise tax will be levied on the brewers (and paid for by beer drinkers) as a “Case tax” or “Barrel Tax” which will triple the current tax on beers of 4.5%abv and go higher on stronger brews.
The Brewers Association based in Boulder Colorado has come out swinging against this proposed tax. The BA represents the many small craft brewers in this country and they are joined by many other alcohol industry trade organizations in opposition to this form of punitive taxation. In a recent letter to BA and American Home Brewing Association members, President Charlie Papazian states that “If such a proposal becomes reality, there is no question that many small brewery businesses will suffer, some will close and consumers will face higher prices and diminished choice in the marketplace”. The letter goes on to say that brewers already pay a disproportionately higher share of taxes compared to other products; with the total tax burden (Federal, State and Local) being 40% of the retail cost of beer whereas the tax burden for wine and other alcoholic beverages average about 24%.
There is no doubt that such taxation (which is always passed on to the consumer), will have a negative effect of craft beers, which already command a hefty premium in the marketplace when compared to mass produced yellow-fizzy beers. It would be a shame to see this wonderful beer culture which is quickly becoming the envy of the world, falling victim to the overreaching hand of the federal government once again meddling in the private sector and ruining an otherwise healthy market (anyone remember the mortgage crisis?) But hey, “Yes they can”!
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