There's a tear in your beer and a levy on your lager

0 Comments | Insight on the News, May 13, 2002 | by Sam MacDonald, | Hans S. Nichols

While Washington insiders scuffle over last summer's $1.35 trillion tax cut and the prospect of making it permanent, a smaller but still intriguing budget question is gaining some momentum: Is it time to give Joe Sixpack a tax break?

At issue is a bill Rep. Phil English (R-Pa.) sponsored last March that would push back the federal tax on beer to its pre-1991 level. "This is an unfair tax on middle- and lower-class Americans," says Jennifer Hall, a spokeswoman for English.

Under current law, Uncle Sam siphons off $18 for every 31 gallons of beer sold. That translates into $9 for fifteen-and-a-half gallons per keg. At any given local watering hole, the tax adds up to a few cents on every glass or bottle of beer that gets tipped back. The bill has 212 co-sponsors despite budget woes. Proponents are waging a campaign to paint the tax as an unfair burden on the working class. The powerful alcohol lobby also is pitching in with the company line.

More sober-minded spoilsports also are weighing in, however. On April 16, representatives from the Center for Science in the Public Interest (CSPI), the Consumer Federation of America and the San Diego Youth Council teamed up with the matronly teetotalers from Mothers Against Drunk Driving (MADD) to hold a press conference across from the Capitol in the Rayburn House Office Building. National President Millie Webb repeatedly noted that MADD is "not a prohibitionist organization," but warned that making beer cheaper would encourage drinking and drunk driving.

Webb claimed that rolling back the beer tax, which she called "astoundingly low," ultimately would lead to 600 deaths every year. George A. Hacker, director of the Alcohol Policies Project at CSPI, had harsh words for industry supporters: "As usual, they are looking for handouts that will fatten their bottom line." A young lady from San Diego complained that where she lives, underage drinking is a terrible problem in part because "beer is already cheaper than milk and most sodas."

After briefly contemplating whether to move to any locality boasting that latest claim, news alert! asked the obvious question: If the current tax of $18 a barrel already is too low, how high, exactly, should it be? According to Hacker, "We have made a number of proposals over the years that are variable." When pressed, he said that if the federal beer tax had kept pace with inflation since 1951 it would stand at more than $50 per 31-gallon barrel -- almost three times higher than it is now. "That might be too much of an immediate sticker shock," he said. But, he added, the "immediate doubling of the tax would not be unjustified."

SAM MACDONALD AND HANS S. NICHOLS ARE REPORTERS FOR Insight MAGAZINE.