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Senate GOP Tax Bill Would Lower Alcohol Tax

by Countable | 11.16.17

What’s the story?

The latest version of the Senate GOP tax plan includes a major excise tax reduction for producers of beer, wine, and liquor.

The amendment is a "modest, two-year version" of the Craft Beverage Modernization and Tax Reform Act.

"It's terrific recognition that distilled spirits have been overtaxed for a long time and this would the first distilled spirits tax reduction since the Civil War," said Mark Gorman, senior vice president for the Distilled Spirits Council.

The Congressional Budget Office (CBO), however, noted in 2016 that "current excise tax rates on alcohol are far lower than historical levels when adjusted to include the effects of inflation."

The tax cuts would expire after two years, on December 31, 2019, unless Congress extends them.

According to the Joint Committee on Taxation, the liquor changes would cost the Treasury $4.2 billion.

Why does it matter?

Here are a few ways the Senate proposal would cut alcohol taxes:

  • Beer, which is currently taxed at $18 per barrel, would now be taxed at $16 per barrel for the first two million barrels produced or imported.

  • Small domestic brewers are currently taxed $7 per barrel for the first 60,000 barrels. Under the new plan, the rate would be cut in half to $3.50.

  • Currently, wines containing up to 14% alcohol are taxed at $1.07 per gallon and wines with 14% to 21% alcohol are taxed at $1.57. The new proposal would apply the $1.07 rate to wines with up to 16% alcohol.

  • Distilled spirits would be taxed on a tiered system. Currently, distilled spirits are taxed at $13.50 per proof gallon. The new proposal lowers that to $2.70 per gallon for the first 100,000 gallons; $13.34 per gallon for anything between 100,000 gallons and 22,130,000 gallons; $13.50 for anything larger than that.

As CNN Money explained, "It's unlikely the tax savings will be passed along to the consumer in the form of a price reduction on beer, wine or spirits. Business owners are looking to reinvest the savings."

Sen. Rob Portman (R-OH) proposed the amendment, saying the changes would produce jobs.

"Ohio is No. 4 right now in craft beer production and we like that," Portman said. "This legislation is only going to promote the expansion and the jobs that come with these entrepreneurial small businesses."

"We're not popping corks yet because there's a lot of stages in the legislative process," said Frank Coleman, senior vice president for the Distilled Spirits Council.

What do you think?

Will lowering the alcohol tax promote the expansion of jobs? Or should the Senate GOP bill focus on alcohol consumers rather than producers? Any other industries you want to see included in the tax overhaul plan? Hit Take Action, tell your reps, then share your thoughts below.

— Josh Herman

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(Photo Credit: Bill Oxford / iStockphoto)

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(88)
  • Dwayne
    11/17/2017
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    Oh that will really help the crisis for alcohol related health issues. Take away healthcare, make booze more affordable and bankrupt even more the health treatment system. Who’s brilliant idea was this? Better solution is to increase tax on anything which contributes to health issues and put money into healthcare treatment. ( booze, cigarettes, pot, no helmets)

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  • Deanna
    11/17/2017
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    No, don’t lower the alcohol tax. Raise the taxes on the top 1%. We don’t need less money and more access to alcohol with no insurance to cover treatment, accidents or death. It’s just a way to control the middle and lower class. We are not brainwashed, nor do we plan to be. We want our country back and lowering the alcohol tax thinking people will drink more, die, get in more trouble to take at more fines is not the way to fix this mess the GOP got us into.

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  • Donna
    11/17/2017
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    We put people in jail for smoking pot but you give away tax dollars to an industry whose products cause more deaths than pot every year. The President and members of this Senate ran on a promise to cut taxes for the MIDDLE-CLASS. If you check, there are probably not a lot of middle and lower class constituents on alcohol lobbyist payrolls in DC. Between the repeal of the freaking estate tax and AMT, the removal of any deductions that actually help the lower to middle class taxpayers, the loopholes left in the code for corporations after the huge tax rate cut, the removal of the ACA mandate, the new idea to "charge" PhD students tax on the tuition they don't pay in an effort to actually do research to help society and now this gift, you have proven this bill is anything other than a give-away to the donors pissed because they still have to help pay for health insurance for their employees who have been underpaid with no benefits for years. I watched Paul Ryan stand up at a microphone yesterday after the vote in the House and actually, with a straight face, declare this to be the biggest tax relief for the middle class in a generation! This Senate bill is worse. Apparently, the new definition of middle-class in this country is those making between $2M and $5M a year. When will Congress take the declining standard of living of the majority of Americans seriously enough to give a damn? Thanks to your leadership, the next generation will be more unable to better themselves and society through higher education, but as long as the beer and liquor keep flowing, at least they will have something to do to pass the time till they die of alcohol poisoning or cirrhosis or behind the wheel of a car. Congratulations, you sink lower every day! The sad part is, you are taking the rest of us with you.

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  • Vivian
    11/17/2017
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    How about changing the taxbill for corporations to include a jobs creation success rate or return of dollars to workers via wage increases for bottom 70% of wage earners in their companies...if money is pocketed, used to buy back stock, used to expand overseas, then corporation should not get tax decrease. Corporations hold workers to results. What about government using same logic on corporations....

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  • Rhonda
    11/17/2017
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    It is highly unlikely that this reduced tax on alcohol will have any significant impact on job creation. My question what is the real reason for lowering this tax? Who really benefits? How will this loss of tax revenue impact other programs or ventures? Where and how will that revenue be made up? We are not given all the facts - only the propaganda. NO NO NO to half ass schemes!

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  • John
    11/17/2017
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    No! Just no!

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  • Pat
    11/18/2017
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    Why? Alcohol is a luxury! Is there any other handouts that they overlooked to major industries in their tax cuts? The lobbies are out in force! Is that why they have to cut subsidies to Medicare and the ACA? Medicaid cut, affordable housing, childcare subsidies will just have to sacrifice along with State and local taxes. This is insane!

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  • I.Got.an.Idea...
    11/17/2017
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    Let the Republicans play their childish games with our lives. Let them prove that none of their silly little ideas never work, but this time, we should document the detrimental effects from their uneducated, unethical plans to rule the world. Then when everyone’s lives are miserable due to the realization that we were all lied to and everything is failing, and Liberals sweep all of the seats, we will implement a Conservative Tax. This tax shall be applied to all Conservatives, because their oppression and unethical, immoral behaviors and actions is a tax on all of us. We are less safe with Conservatism around us!

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  • RadicalModerate
    11/17/2017
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    That’s messed up. I get really stressed out sometimes and would like to relax and enjoy some aromatic connoisseur cannabis. Some Northern lights, or skunk #1, or some Grand Daddy Purple.

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  • NoHedges
    11/17/2017
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    Good, because it is going to take a lot to get middle-class America to swallow the GOP tax bill.

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  • S
    11/17/2017
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    Special interest. Pet projects. Rob Portman “represents” some of the poorest counties in Ohio yet he would rather give a 42 billion dollar tax break to beer, wine, and alcohol and gave his constituents along wit all the other low and middle income individuals pay for that 42 billion. How are you being paid Rob? By the keg or cask? There won’t be any job growth from this, so it’s for some self-interest of yours. How much money do they give you? Any new beer or wine going to be named “in your honor?” Can’t wait to vote you out of office. Bugs Bunny would be an improvement over you. You are an insult to Ohio.

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  • V
    11/19/2017
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    It must be a really bad bill if they think we may all resort to alcohol.....

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  • Casey
    11/17/2017
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    Golf courses, private jets, booze? These are luxury items and should be taxed along with cigarettes, guns and soda pop to help pay for all the damage they do to our health and our environment. Talk about blatant disregard for what’s right. I’d ask how this can get any worse but I don’t wanna put the challenge out there for these people who are supposed to represent their voters not their donors. Gimme a break.

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  • Stephanie
    11/17/2017
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    This helps small craft breweries. I’m for anything that helps smaller businesses and the self-employed.

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  • Althena
    11/17/2017
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    Excuse me. Alcohol is an addictive drug which causes more problems than it solves. Why is this drug legal when marijuana is still fought at the federal level and it actually can have amazing benefits. Take veterans with ptsd- they can use thc to alleviate a myriad of symptoms- where alcohol makes everything worse. Why are we giving this a tax cut while also neglecting to do the best for our veterans and people in need? Oh that’s right! You guys work for the donors, not the people. Man, I just keep forgetting that. Vote for justice democrats. End Citizens United. End lobbyists.

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  • PLD
    11/20/2017
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    Great; raise the taxes on the middle class so you can help your industrial and 1% political supporters. Then, help the liquor industry and make it cheaper for the 1% to celebrate and the rest of Americans to drown their sorrows. This certainly justifies putting the country in further debt besides! What a boondoggle!

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  • KansasTamale
    11/17/2017
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    HOW IS lowering the alcohol tax going to promote the expansion of jobs? My question is which senators have interest in or have received pac money from the distillers ?? Shouldn’t the Senate GOP bill focus on alcohol consumers rather than producers? No other industries Gould be given a tax break either. Those people don’t spend the money they get from tax breaks, the middle & poorer classes are the ones who create the spending in this country. If they don’t have money, the economy is going to collapse just like the state of Kansas’ did under Giv Brownback.

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  • August
    11/20/2017
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    This is just a giveaway to the Alcohol lobbyists. It will not lower prices, generate a real gains in jobs. Since our government is in massive debt, do you see cutting taxes on something know one needs, as a good idea?

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  • Sheila
    11/19/2017
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    No way. We have enough alcoholism. I say the tax should be increased on alcohol.

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  • Scott
    11/18/2017
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    Why?????? There is no need to do that. Period!

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