THE GIST
The call for beer industry tax reform has gained some momentum on Capitol Hill. Following a brewery-led march on Washington at the beginning of the month, the Craft Beverage Modernization and Tax Reform Act recently added its 218th co-sponsor in the House of Representatives, earning it majority support in the chamber.
If passed into law, the bill would dramatically reduce the federal excise tax rate imposed on brewers at varying rates depending on their size. Further, it would enable unrelated breweries to transfer beer between facilities relieved of tax liability.
In addition to being backed by both major political parties, the bill has the support of the Brewers Association, which specifically represents small, independent craft brewers, as well as the Beer Institute, which lobbies for the beer industry at large.
WHY IT MATTERS
Since gaining support from Rep. David Rouzer (R-NC) on June 8, the bill’s 218th co-sponsor, the legislation has only continued its forward progress. As of this writing, the bipartisan document boasts now 226 signees, comprised of 131 republicans and 95 democrats. Furthermore, this momentum coincides with the House Small Brewers Caucus surpassing 200 members.
“Cheers to the most bipartisan thing in DC,” tweeted caucus chair Rep. Peter DeFazio (D-OR), in light of the milestone. “Craft beer!”
A quick reminder, though: none of this is indicates that the bill will actually pass. In fact, this graduated barrel tax initiative has proven to be the beer industry’s Sisyphean hill: each year, it pushes the rock up to the capitol, garnering considerable support along the way, only to see the session close without action.
Before forming a unified front behind this current bill, the Brewers Association and Beer Institute had been pushing a pair of competing bills for years, a dueling effort which critics believed served ultimately to cancel each other out rather than forge ahead in any real way.
Further, the pols themselves, despite theoretically supporting the move, have had trouble seeing the forest through the trees here. I interviewed Rep. DeFazio about this back in 2014 and asked why, after years of seeing the same bills over and over and gaining ostensible support, have lawmakers been unable to pass beer tax reform through? He said at the time: “The problem around here is we don’t look at things on a holistic basis… It’s just, ‘does it cost the Treasury money?’ Some. They say, ‘Well, that’s a net loser.’”
Real progress seemed to come, though, in 2015, when the BA and BI came together to combine pieces from both bills in drafting the so-called Craft Beverage Modernization and Tax Reform Act, introduced in June of 2015 to the 114th Congress. That bill—like today’s entry of the same name—also garnered majority support in the House. It had majority support in the Senate, too (today’s bill, meanwhile, currently carries 44 co-sponsors in the Senate, seven shy of a simple majority). That legislative session closed without action.
All that said, the bill earning majority support in the House today is still good news. We take the trip down memory lane, though, because it's worth remembering that democracy is about more than mere majorities. Which is to say, there’s still work to be done.
—Dave Eisenberg