Editorial: Give small breweries a tax break
Published 12:00 am Sunday, December 29, 2013
Next year could be a better year for Deschutes County’s breweries. Congress is considering lowering the federal excise tax on beer.
Rep. Greg Walden, R-Hood River, supports the bill, as do Oregon Sens. Jeff Merkley and Ron Wyden, both Democrats.
The tax on beer is already progressive. Breweries producing less than two million barrels a year pay $7 in federal tax on the first 60,000 barrels. Above that, they pay $18 a barrel. A barrel is 31 gallons.
The proposed Small BREW Act would drop the tax on the first 60,000 barrels to $3.50. Above 60,000 barrels but below 2 million the tax would be $16 per barrel. Over 2 million barrels and it would be $18 per barrel.
To give you some perspective on size, most craft breweries produces less than 60,000 barrels. Deschutes Brewery recently installed capacity to make more than 450,000 barrels a year. A megabrewery like Anheuser-Busch InBev produces millions.
Why should beer taxes drop for small breweries?
Lower the taxes and instead of the money going to Uncle Sam it will go back into the industry. A brewery could expand its capacity. That means hiring more workers. That’s arguably better for the county and the country.
Deschutes County already has some of the highest pint per capita sales in the state. According to the state data from a few years ago, it also had one of the highest concentrations of jobs in the brewery industry.
But you didn’t really need statistics to tell you that. Breweries are booming here with no sign yet that it’s just a bubble.
There are naysayers who don’t like the bill. The megabreweries don’t. They are feeling growing competition from small breweries. They have an alternative bill to cut taxes on all breweries.
There are also those who want to capture more revenue for the government by increasing the taxes on breweries. Inflation has gone up, so should beer taxes, they argue.
We’d rather grow jobs than grow the federal government. And small breweries have shown they can grow American manufacturing jobs. They make a product more and more Americans and people around the world crave. Congress should give them the tax break.