The Syntax of the Sin Tax: A Craft Beer Stimulus?

By Wesley Griffin | October 2, 2010 | 1 Comments |
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One of my best friends from high school was a German exchange student named Stefan.  His English was solid, and he was intelligent and well-spoken, in spite of spending the majority of his free time convincing us to watch and re-watch the MTV movie Orange County with Jack Black.  Occasionally, he would even start deep conversations and throw out English concept words that I had never said out loud, that I had perhaps glossed over once or twice in a textbook.  He was impressive.  Yet one day, in my car after soccer practice, he was trying with all his willpower to explain to me the location of the injury he’d suffered just moments earlier.  He was saying a bunch of nonsense – and mutual frustration was setting in – when it finally clicked.  “Y’know, it’s jaaast… it’s like the fingers on yah feet.”  I understood then that he had hurt his toe.  I also began to understand how similar people can think about the same thing in very, very different ways.

This underlying truth is supremely evident in the beer industry; literally, the entire cycle is contested, from production to consumption.  Sometimes it is done on religious grounds, with any alcohol seen as a fundamental vice that undermines the morality of our society.  Others put forth similar arguments but from a different perspective, having seen alcoholism play a destructive role in their friends’ or family’s lives.  These opinions have long been held and are largely responsible for what many refer to as “the sin tax.”  In addition to the standard tax load faced by small businesses, craft brewers also pay a federal excise tax of $7 on each of their first 60,000 barrels produced in a year.  They then pay $18 on every barrel above that mark, all before normal sales taxes eat into their margins even further.

We told you yesterday about the changes being made in states’ alcohol-related legislation to increase revenue, and a new bill currently in the House may allow the craft beer industry to stimulate local economies even further.  The proposed bill would cut the excise tax on a brewer’s first 60,000 barrels in half and knock the high-volume tax down to $16 per barrel.  Critics say the extra money will simply result in cheaper beer, increased consumption and all the health and societal problems that entails.  Many brewers argue that such an influx would allow them to expand and hire, creating new jobs.

As reports, a new Harvard study backs up the eager brewers.  The study found that the bill – now also being co-sponsored by Democrat John Kerry and Republican Mike Crapo in the Senate – would create 2,700 new jobs nationwide within 18 months and another 375 during each of the next 4 years.  What’s more, the study concluded that the taxpayer burden for each newly created job under this bill would be less than 5% of what each new job created under President Obama’s stimulus package was estimated to cost.  Many of the bill’s proponents believe this nominal amount would be reclaimed through the increase in payroll and sales taxes.

Of course, these arguments might fail to convince the majority of hard-line opponents.  Just as my friend Stefan had to get around the linguistic constructions of hands and fingers before we could discuss his toes, those of us who see craft brewers as artisans – mad scientists who generate a buzz with their creativity and skill – will have to wait until people overcome the mental obstacles that take barley and hops to be vice and sin before we can discuss things on level and productive ground.  In the meantime, perhaps this so-called stimulus plan for craft beer will help give a neighbor a job, give a friend relief from debt, and give a lot of us enjoyable nights anticipating the next leap forward in the craft beer revolution.

Your Choice. Your Beer. Drink Up.
- Beer Universe

1 Comment · The Syntax of the Sin Tax: A Craft Beer Stimulus?

  • Of all the proposed government bills out there - this NEEDS to get passed. Seriously, how small a burden on the government can this possibly be?

    Since I work for beer, I think that I should get some of the stimulus money as well.

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