Monday, May 13, 2013

Tax On, Tax Off

There's a beer battle (don't do it) brewing (sorry) between Washington D.C. and public health researchers. is reporting that bi-partisan lawmakers, U.S. House Representatives Tom Latham (R-IA) and Ron Kind (D-WI) are proposing a 50% cut to the federal beer excise taxes, putting it at it's lowest rate in 23 years. The Brewers Excise and Economic Relief Act of 2013 or—coincidentally—the BEER Act, as it's known, would eliminate the tax (for those breweries producing less than 2 million barrels a year) on the first 15,000 barrels produced and reduce the rate from $7 per barrel to $3.50 from the 15,001 to 60,000 mark. For breweries producing quantities above 60,000, the rate rises to $9 per barrel—still less than the existing $18 for both small and large breweries in the U.S.

All said and done, the BEER Act would cut a nickel off the cost of every 12 ounce bottle sold in the U.S.. The bill, introduced last week, hopes to ease the tax burden on the booming beer biz in the U.S., especially smaller breweries. That, and waving the "We love beer!" flag is a great a way to garner re-election votes, because as we all know that's why politicians do everything.

Needless to say The Beer Institute and the Beer Association are rejoicing, but who doesn't like cheaper beer, right?


According to Dylan Matthews of the Washington Post's Wonkblog, (Hey, didn't I evoke the Post's name, just a few days ago?) Duke University's Phillip Cook and UNC's Piette Durrance, who authored a paper in the Journal of Health Economics, might not necessarily agree. You see, Cook and Durrance found that when the Federal excise tax was raised way back in 1991—a mere 6%—there was an estimated 4.5% initial reduction in alcohol-related injury deaths, and the hike had a larger affect on overall violent crime. The article also sites analysis done by University of Florida researchers Alexander Wagenaar, Amy Tobler and Kelli Komro who say,
“Our results suggest that doubling the alcohol tax would reduce alcohol-related mortality by an average of 35%, traffic crash deaths by 11%, sexually transmitted disease by 6%, violence by 2%, and crime by 1.4%.”
Also according to Matthew's article, Cook notes that since the tax isn't indexed to inflation,
"$18 a barrel turned out to be a nickel a drink, and inflation since then has eroded the value of that nickel down to less than three cents ... We’re almost back to 1990 even without any new legislation, in real terms.”
So where does that leave us? Cut the tax and get cheaper beer, keep the tax and save lives. This is like Sophie's Choice for beer drinkers. Seriously though, I can't in good conscience say that a 30¢ difference in the cost of a six pack would be such a burden or a relief that I could justify someone dying—40¢ maybe, but not six nickles worth (That was a joke). Yeah sure, I suppose a nickle per bottle adds up overtime, and saying violent crime will rise by 2% or drop by the same amount—depending on your slant—seems a bit abstract. But, that whole people not being killed in firey automobile crashes—or not as many crashes—makes you think.

I think I'll go ruminate on this over a beer.

*As well as 33 co-sponsors—split nearly 50/50 Dems to GOPers.

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