Alcohol Industry Wins Big With Tax Reform Law
By L.A. Williams
Christian Action League
December 27, 2017
While President Trump touts his first legislative win, politicians disagree over whether the tax reform bill he signed Friday will most benefit big corporations or middle-class families. But one fact that no one is questioning is that the new law is delivering a huge financial gift to the alcohol industry.
According to the nonprofit Alcohol Justice, the two-year tax break will cost the nation $642 million in lost revenue and benefit the booze industry to the tune of $3.2 billion.
The cuts, part of the Craft Beverage Modernization and Tax Reform Act that was added to the Senate version of the tax bill early this year, were said to be aimed at small brewers, distillers and wineries. But according to alcohol watchdogs, the liquor distillers making more than 100,000 proof-gallons a year will take home nearly three-fourths of the benefits. Of the estimated $126 million in tax cuts earmarked for beer makers, $50 million will go to seven “mega-craft” brewers.
“Lower taxes are usually a cause to celebrate, especially those that help spur business growth to create jobs and feed families, but when an industry that creates so much harm in our nation is rewarded in this way, it defies all logic,” said the Rev. Mark Creech, executive director of the Christian Action League.
“Alcohol kills close to 88,000 people each year and costs the United States $249 billion in expenses related to accidents, violence, chronic illness and lost wages. Why do we continue to reward such an enterprise?”
In particular, the rewards include lowering the federal excise tax on beer from $7 to $3.50 per barrel on the first 60,000 barrels for brewers producing less than 2 million barrels per year through 2019. All other brewers will get a $2-per-barrel reduction on their first 6 million barrels.
Makers of distilled spirits, which were taxed at a flat $13.50 rate, will now see the rate lowered to $2.70 per proof gallon on the first 100,000 proof gallons as a tiered rate is put in place. And wineries are also big winners in the tax reform measure, which will allow them to claim a credit of between $.535 and $1 per gallon on their first 750,000 gallons produced.
All three industries — beer, wine and distilled spirits — expect the new law to propel growth.
“Alcohol industry leaders want to talk about how many jobs are going to be created if they reinvest all this money they will save in taxes, but they don’t want to talk about how many more families will be harmed or lives lost because of a rise in alcohol consumption,” the Rev. Creech said. “Furthermore, when these changes take effect beginning Jan. 1, the nation will have less money to use to treat alcohol addiction and the secondary health problems it creates.”
Earlier this year, Alcohol Justice pointed the finger of blame for the legislation toward Sen. Rob Portman (R-Ohio) who wrote the amendment injecting language from the Craft Beverage Modernization and Tax Reform Act into the Senate version of the tax bill in late January. The organization reported that Portman had received $210,981 from alcohol interests since 2010. But there is plenty of blame to go around, Creech said, as the alcohol tax cuts gained bipartisan support in both chambers.
“Sadly, it seems that giving alcohol this huge Christmas present was about the only part of the tax reform bill that lawmakers could agree on, and it is the most egregious part,” Creech said.