Getting Political - H.R 4278

This bill is probably recent news to most Idahoans, as Senator Crapo just became a co-sponsor of the bill.  I have not seen much written locally on this yet, but I wanted to give everyone my bias news bit on the bill.  Am I an authority on the matter, not really, but I am sure that I know more of the details than the self-proclaimed "experts" that litter the online newspaper comment sections.

Note: I have not seen a single comment that was either uninformed or against the bill.  I made the "expert" comment because there is nothing more maddening to me than seeing uniformed verbal diarrhea on the internet where you can say anything you want tucked behind the security of your computer and username.

The headline for this bill is cutting the federal excise tax on beer from $7.00 to $3.50, but that doesn't mean all the beer made in the US will have a lower tax.  Almost all beer brewed by the big breweries (Bud, Miller, Coors etc) is going to be taxed the same.  The vast majority of beer made in the US will still be taxed at $18 per barrel, the total tax revenue for the government is not going to be cut in half  In total, this cut affects less than 5% of the beer made in the US, but helps an industry that employs over 100,000 people.  The bill actually sets a more graduated tax rate for all breweries.  When the current tax structure was passed in 1976, the idea was to give small breweries a lower tax rate than the big breweries.  As it stands right now the first 60,000 barrels is taxed at $7.00 per barrel and anything over that is taxed at $18.00 per barrel.  The proposed structure would be $3.50 on the first 60,000 barrels, $16.00 on barrels 60,000 to 2 million and $18.00 on everything over 2 million barrels.  The Brewer's Association has a more detailed look at the bill here.

That is a sort of overview on the bill, here are my thoughts on how it affects me and you.  First, it is not going to change the price of your beer.  A savings to a brewery of $3.50 per barrel, means $1.75 per keg and about 1.5 cents per pint at a bar, sorry you are still going to pay $4 (or so) for a pint.  No, brewers are not lining their pockets with this saving.  For a start-up like me, I see this tax break as way to help me to become a viable business.  Lets say I make 1,000 barrels in my first year, after doing the math, it is not a huge amount of savings, but it will mean I can hire additional employees or move into bottling/canning that much sooner.  Every bit counts when you are a small business.

The changes done in 1976 reflected the industry at the time, since then, there has been drastic change in the industry and HR 4278 is trying to update the laws to better reflect the industry today.  This bill is a great start, hopefully it passes, then maybe they can take a look at the really outdated alcohol laws on the books.

I am generally not a very political person and this could be the first time I have really taken a true interest in what is going on in Washington.  I even sent letters to both Crapo and Risch asking them to support the bill.  Don't worry, political issues wont make make many appearances on the blog.

Sorry for the political stuff, but I wanted to present the facts and give my opinion on the matter.

UPDATE: So after carefully writing this to get my facts straight, I messed up a little.  While HR 4278 is the House bill to make these changes, the bill that Senator Crapo is a part of is Senate Bill 3339.  The premise is still the same and I guess it is just the Senate version of the House bill, I really don't know enough about this stuff to know everything.  Here is a link to a story from the Brewers Association.