- The Washington Times - Friday, August 17, 2001

Beer would become the least-taxed form of alcohol under legislation being considered in the House of Representatives.
Rep. Phil English, Pennsylvania Republican, and 187 co-sponsors are pushing for a bill that would cut the beer tax.
Proponents argue that the $18 per-barrel tax is an unfair vestige of the tax increases approved in 1990 to reduce the deficit.
They say the tax not only hurts beer producers and their employees, but also beer consumers — a group that with the rhetorical shorthand "Joe Sixpack" has become synonymous with ordinary Americans.
"By repealing the 1990 tax hike, we can put millions of dollars back into the pockets of working Americans who drink beer," wrote Mr. English in a letter soliciting support for the bill.
The bill would cut the beer excise tax in half, costing the government about $1.7 billion a year in revenue.
Proponents of the bill, along with backers of a more modest tax reduction for distilled spirits and supporters of a virtual elimination of the tax on wine, did not try to attach their legislation to the $1.35 trillion tax cut passed in Congress this past spring.
Instead, they agreed to support the tax-cut bill, hoping that their demands will be met when a second business-tax bill comes down the line.
"I don't think any of the three sectors anticipate action on this type of legislation this year," said Bobby Koch, senior vice president with the Wine Institute. He said a bill cutting the wine excise tax from $1.07 per gallon to 17 cents per gallon will soon be introduced in Congress, but that — like the beer and distilled-spirits legislation — it will be debated sometime in the future.
Beer, wine and distilled spirits have always been taxed differently, in part because they are produced differently, but largely because of people's attitudes about the beverages.
Up until 1914, there was no tax on wine at all. After the era of Prohibition, wine supporters secured a tax rate that was a fraction of that imposed on distilled spirits and beer.
They argued that wine should be treated more like food than alcohol, stressing that taxing wine would hurt grape growers, and that "the consumption of table wines was less socially undesirable than consumption of distilled spirits," according to a recent report by the Congress Research Service.
Similarly, distilled spirits have always been taxed at a higher rate than beer, when measured per ounce of alcohol. But the once modest difference expanded considerably after World War II.
Frank Coleman, vice president with the Distilled Spirits Council of the United States (DISCUS), blames the rise in the tax discrepancy between the two beverages in part on the distilled-spirits industry's decision to volunteer not to run advertisements on television.
As a result, because of advertising beer has become positively associated with almost every American pastime while the public continues to have a more negative attitude regarding distilled spirits, Mr. Coleman and other alcohol industry experts said.
The supporters of lowering taxes for beer, wine and distilled spirits considered joining forces last spring to back a single alcohol-tax-reduction bill, but the proposed deal collapsed, one industry source said. While the beer and wine supporters were satisfied to roll back excise taxes to 1990 levels, DISCUS wanted to go back to the 1985 rates.
That's understandable.
In 1985, the tax on beer and wine was not increased, but the tax on distilled spirits went from $10.50 per gallon to $12.50 per gallon.Then in 1990, Congress, for the first time in 40 years, increased the beer tax from $9 per barrel to $18 per barrel and the wine tax from 17 cents per gallon to $1.07 per gallon.
Distilled spirits also saw another increase from $12.50 per proof-gallon to $13.50 per proof-gallon.


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