Some Legislation I Can Get Behind

Tuesday, May 15, 2007

Since this blog covers all things beer, I thought I would draw your attention to HR 1610. This bill will amend the Internal Revenue Code to reduce the tax on beer from $18 a barrel to $9 a barrel. I should note that a brewer that brews less than 2,000,000 barrels a year only pays $7 per barrel for the first 60,000 barrels (and $18 per barrel after 60,000). The bill has 52 co-sponsors, including one from Michigan, Dale Kildee (D).

I don't know what chance this has in the House, but I found out that the beer and wine industry gave $10 million to candidates in 2005-2006 and they probably epect something for that money. This bill is opposed by some public health groups and other assbags that want to tell me how much beer I should drink. Seriously, I think that $18 a barrel is a pretty high tax, considering the wholesale price far a barrel of beer.

10 comments:

Noah 8:29 AM  

If I was a microbrewery owner, I would hate this bill. Allowing Bud and Miller to pay alomst my taxes on beer and tap into my market? No way. Unless there was a provision for micros to pay nothing up to 60,000 then $7 after that...

Noah 8:29 AM  

If I was a microbrewery owner, I would hate this bill. Allowing Bud and Miller to pay alomst my taxes on beer and tap into my market? No way. Unless there was a provision for micros to pay nothing up to 60,000 then $7 after that...

Sopor 12:34 PM  

I don't know Smitty, I don't think this is a bad thing...

I mean first we gotta remember that 'Corporations' don't pay taxes. Taxes may be levied against businesses, but taxes levied against business are always paid by individuals. Either consumers, shareholders, employees, or owners... This statement is more true the larger the business is. Small businesses are more heavily affected by taxes. But anyway, what would Budweiser do if taxes were increased at some high number of barrels that only they produce (I know, thats not what we're talking about but bear with me...)? I think I know what they wouldn't do, they wouldn't increase prices. More likely, they would cut back on those hops they increased a little while ago, cut some employee benefits, and 'reduce calorie content' or some crap aka water down Bud Light even more.

So while AB would surely love some tax cut, I'm sure taxes are a minor concern for them in the costs of making beer. They pass those costs on to somebody else somehow else.

Small breweries have a BIG hurdle at that 60,000 barrel limit. A brewery that is already scraping by with barely any margin is in no position to begin paying double the tax to be able to produce an additional 5000 barrels a year. I've spoken with at least one brewer who had no interest in attempting to meet demand and grow simply because of the increased tax liability. The same provision that was meant to make it easier for breweries to get started makes it that much more difficult for them to grow and expand beyond state or small regional breweries.

So I don't know, in general I'm all for lowering taxes on anything anytime, with some exceptions. And I don't see any reason why this would hurt the craft brewers any more than the current scheme, especially with demand increasing every day for quality craft brew.

Maybe this'll offset the increased tax we'll be payin' here in Michigan!

Sopor 12:47 PM  

On a TOTALLY unrelated subject... I bought a 48-quart Igloo Ice Cube cooler yesterday! I'm sure you can guess what that's for, my first Mash Tun! YEA!!

so I got a quick question, what kind of sparging do you do?

steves 2:05 PM  

Do you think that people that like microbrews will start buying Bud and Miller just because it is a little cheaper? Maybe, but I just don't see it.

Anonymous,  2:08 PM  

Colin, you raise good points. Frankly, this brings me back to the early days of this blog, when the brewing and chugging of beer was used as an analogy for politics and life.

If I understand Smitty, he isn't so much commenting on the specific rates as he is on the rate structure.

Just by the nature of brewing, it is cheaper to make large quantities of beer than small ones (of course, that is true of almost every industry). In order for microbreweries to survive, it helps if they can mitigate the competitive advantage enjoyed by the big brewing companies. If the Millers & AB's of the world paid the same taxes per barrel, the economies of scale could drive Arbor Brewing and the Grizzly Peak Brewery (two of my old haunts) out of business.

Now, it would be a legitimate argument to say that the market should decide which businesses survive, and government should treat everyone the same. But we are always talking about the growth potential and economic power of small businesses and start-ups. Heck, Bells used to be a garage brew. Give them a tax advantage, and they have the chance to grow. Once they are successful, they can return the favor to the state by paying slightly higher tax rates.

Am I a socialist commie pinko? Maybe. But I also enjoy a good Imperial Stout or Belgian Trippel...

Sopor 2:47 PM  

Well, you've got a good point b mac, anything that allows AB to produce beer cheaper, and Founder's not to get the same treat, works in AB's favor.

Personally, it seems to me that the tax structure should have three tiers, one for brewpubs, one for micro/small-regional breweries, and one for nationals.

And I think the tax should be payable in beer.

Noah 3:54 PM  

b_mac was straight-on, Colin. It's more the overall structure unfairly weighted towards being bigger. I do see several tiers of business; afterall, we've seen the effects of unmitigated, low-tax threshhold business like Wal-Mart on local economy and small business/enterprise.

I understand everyone wants a break, but when you give a massive break to a huge corporation and bring them nearly to the tax structure of a small business, the small business gets crushed. The only way to make it fair is to lower the small business too.

Anonymous,  3:59 PM  

If taxes could be paid in beer, I would be first in line to apply for a job with the IRS...

Mmmmmmm... frosty delicious redistribution of wealth...

Noah 4:01 PM  

Oh, and Colin, on sparging:

If I am doing a partial-mash, heavy on the extracts, I usually have my grains in a sack; there's usually only a total of 2-5 pounds or so of "specialty grains." So I have the water the grains are steeped in. I simultaneously have another 1.5 - 2 gallons of water in another pot right next to it getting up to 165 degrees. When it's time to sparge, I lift the grain sack out of the water it's been steeping in, and put it in the other pot, swish it around, dunk it a few times, lift the bag out, and discard. I then combine the two pots of water, and start the boil. Seems to work, I get good results, and haven't wasted any beer.

I have also lifted the garin bag out, put it in a collander, put the collander over the mouth of the steeping pot, and dumped a gallon or so of hot water over it and thus into the pot below. I boil from there.

Finally, in the all-grain, I have a bucket with a false bottom with a bunch of holes in it and a hose that leads to another bucket. I pour the contents of the pot into the bucket. I let all the water in the current bucket filter through the grain bed and through the false bottom and into the new bucket. I add some 165-degree water to the bucket with the grains one more time to rinse. Got the idea right outta Charlie Papazian's book. Seems to work okay, just more complicated.

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