A detailed economic analysis by Global Insight and Parthenon Group in 2005 found that if all the taxes levied on the production, distribution and retailing of beer were added up to $31.9 billion or more than 40 percent of the retail price. WOWSERS!
The site Cost Of Government puts the tax of beer to be over 44 percent. The third most taxed item by the U.S. government behind cigarettes, hard alcohol and gas.
Fuck that’s a pretty amazing business model that the government has got going on there.
And whether you like a small craft brewed chipotle India pale ale or Budweiser, that shit is getting taxed out the wazoo. However some brave politicians are attempting to lower the taxes on the scrumptious suds.
Two competing bills were proposed in February to help ax the tax. The proposed Small BREW Act would provide targeted federal excise-tax cuts for beer made by domestic brewers, with tax relief based on volume. By changing the broadening the definition of a small brewer.
Reuters provides the intoxicating details:
The federal government now levies a $7 tax on each of the first 60,000 barrels produced by small brewers. After that, the tax spikes to $18 a barrel. Businesses not defined as small brewers — those that produce more than 2 million barrels annually — must pay the $18 federal tax on every barrel they make.
The proposed bill, however, would halve the tax for small brewers on the first 60,000 barrels to $3.50 a barrel and redefine a small brewer as a business producing fewer than 6 million barrels a year, as opposed to the current 2-million barrel standard.
The bipartisan bill was introduced by Senators Ben Cardin (D-Md.) and Susan Collins (R-Maine). It has 25 Senate sponsors from both parties. See what beautiful changes we can make when both parties work together to help American citizens?
The Fair BEER Act is another bill that would also make brewskis cheaper for the regular Joe.
A competing bill, the Fair BEER Act, would provide federal tax relief for brewers of all sizes that are headquartered both domestically and abroad. Brewers producing 7,143 barrels or less a year, which represents 90 percent of brewers — would be exempt from paying federal beer excise taxes.
Brewers who produce between 7,144 and 60,000 barrels would face a $3.50 a barrel excise tax. Production in excess of 60,000 and up to 2 million barrels would face a $16-a-barrel tax. An $18-a-barrel tax would apply to production beyond 2 million barrels.
The Fair BEER Act has 23 co-sponsors and was the brainchild of Representatives Steve Womack (R-Ark.) and Ron Kind (D-Wis.). Team-fucking-work!
Despite the high federal taxes on beer, there are also excessive state taxes that drive the price up. Tennessee levies the highest excise tax on beer at $1.29 a gallon. Alaska comes in second at $1.07 a gallon. Meanwhile you lucky people who live in Wyoming pay a measly $0.02 a gallon.
However the tax-slashing doesn’t just apply to the good folks on Capitol Hill. State legislators are also looking to reduce the high taxes on beer.
State legislators in Wyoming, which pays the lowest tax on beer in this great country of ours and only generates $300,000 annually for the state, are looking to get rid of the excise tax entirely. In January, the Wyoming House of Representatives passed legislation that repeals the state beer tax. The bill is currently pending in the Wyoming Senate.
Politicians are very aware that the beer business is big business, and contributes nearly $250 billion a year to the national economy, not to mention 2 million jobs. So let’s all have faith in our great politicians that they do the right thing, the American thing, and make beer cheaper.