Call to Act
Federal Excise Tax
Alcohol tax increases are one of the options Congress is considering to pay for President Obama’s healthcare plan. A proposal presented to the Senate Finance Committee would raise the excise tax on all alcohol to $16 per proof gallon. The plan would mean a 233 percent tax increase on wine, a 145 percent tax increase on beer, and a 19 percent tax increase on spirits.
Call to Action!
Write to Congress and tell them not to raise the federal excise tax
Dear Chairman Baucus and Ranking Member Grassley,
I urge you to reject proposals to increase the federal excise tax on alcohol in order to pay for health care reform.
Attempts to raise funds to pay for health care reform through alcohol tax increases will unintentionally hurt those who are the least able to shoulder the burden. Taxes like the one proposed are regressive and punish those who are the least able to pay for enjoying a perfectly legal alcoholic beverage. Under current law, individuals making less than $20,000 per year face federal alcohol tax burdens that are more than 18 times higher than individuals making in excess of $200,000. Raising taxes on those who are struggling the most in this economy is the last thing that should be done.
As it stands now, more than a third of the shelf price of alcohol comes from direct excise and sales taxes, which means the government at all levels earns $2 for every $1 earned by producers, wholesalers, and retailers. Numerous economic studies have shown that increasing the already hefty tax load on alcohol will result in lost jobs and decreased sales. When the beer tax was doubled in 1991, approximately 60,000 jobs were lost. In that same year, an increase in excise tax on spirits resulted in less federal alcohol tax excise revenue for the following five years and the elimination of 98,000 jobs. The result of these lost jobs was that states had to pay out $151 million in unemployment benefits.
One of the most detrimental things to do right now is to create a situation that will result in additional lost jobs.
In this tough economic time, with multiple industries lining up for bailouts, the restaurant industry is not asking for government assistance. What we are seeking, however, is to not be hit with even greater costs while operating on razor thin profit margins because of declining sales, increased product costs and other operating challenges during this bad economy. Increasing the alcohol tax will be the final straw to putting already struggling companies in the line asking for a bailout.
I, again, urge you: Do not include an increase in the federal excise tax on alcohol in the funding for health care reform.
Thank you for your consideration.
Sincerely,
