Congress Considers Rolling Back Federal Beer Tax

Published December 1, 2003

As Pennsylvania lawmakers ponder a new “drink tax,” Congress is considering a rollback of federal excise taxes on beer.

A bipartisan group of House lawmakers, led by Representatives Phil English (R-Pennsylvania), Earl Pomeroy (D-North Dakota), and Christopher Cox (R-California), reintroduced on March 18 legislation to roll back the federal beer excise tax by 50 percent to its pre-1991 level, $9 per barrel. The legislation, H.R. 1305, currently has 168 cosponsors, and its sponsors expect to surpass the 226 supporters the legislation attained last year.

A similar measure, S. 809, is pending in the Senate.

“The beer tax is a non-sensical, anti-consumer, prohibitionist throw-back. It’s past time that we roll back the beer tax,” said English.

The 1991 doubling of the tax, to $18 per barrel, is the only remaining “luxury tax” of several enacted in 1990. The others have been repealed.

According to the Beer Institute, the national trade association for the brewing industry, the excise tax doubling caused a loss of 31,000 jobs in brewing, distributing, retailing, and related industries. Taxes represent more than 44 percent of the price of beer.

“When a tax starts to approach half the cost of what Americans pay for any product, something has to be done,” said Pomeroy. “It’s time to roll back this tax.”

Cox, who is chairman of the House Policy Committee, echoed Pomeroy’s sentiments: “Middle-and lower-income Americans are hit hardest by this confiscatory tax. The less expensive the brand, the higher the tax rate. The 90 million average Americans who indulge in the ‘luxury’ of purchasing beer are now paying some of the steepest tax rates in our society.”

Jeff Becker, president of the Beer Institute, expressed hope Congress will act soon to rollback the tax.

“It is way overdue for Congress to rollback the doubling of the beer excise tax that has damaged the beer industry economically and disproportionately impacts low and middle income American consumers. We are hopeful that the overwhelming support for the beer tax rollback will encourage Congress to act.”

John Skorburg is managing editor of Budget & Tax News. His email address is [email protected].