Beer Rebellion?

A tax on liquor brought America the Whiskey Rebellion two centuries ago. Now the brewing industry is looking to start the Battle over the Beer Tax.

Congress doubled the tax to $18 a barrel - about a dollar a case - in 1990 when it also passed tax hikes on luxury items such as planes and yachts. Three years later, most of the luxury taxes were rescinded but the beer tax remained, the Associated Press reported.

"It's an equity argument," Miller Brewing Co. spokesman Michael Brophy said. "It's certainly not a luxury item, and it's already taxed at the state level, and will still be taxed at the federal level. There's a basic fairness issue."

The beer industry is mounting its most aggressive tax-cut campaign in years, believing that with a healthy budget surplus and a tax-cut proponent in the White House its chances have been enhanced, said Jeff Becker, president of the Beer Institute, the industry's trade association. The campaign includes ads in several Capitol Hill publications.

Becker said most beer drinkers are low- and middle-income wage earners who could use a break. "They aren't buying $50,000 cars or private planes and yachts," he said.

More than 150 members of Congress have signed on as co-sponsors of legislation that would halve the beer tax, the report said. Rep. Jerry Kleczka, D-Wis., hasn't supported previous efforts to reduce the tax. He said he decided to be a co-sponsor this year because Congress voted to eliminate the estate tax.

Reducing the tax to its 1990 level would cost the federal government about $1.6 billion a year. Kleczka, a member of the tax-writing Ways and Means Committee, said the bill's chances of passage are slim.

Becker noted that when the tax was increased a decade ago, domestic production declined for five straight years. It has rebounded in recent years, but remains about 5 million barrels below the 1990 total of 184.5 million barrels. The beer tax legislation wouldn't affect microbreweries, which pay only $7 a barrel on the first 60,000 barrels they brew.
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