Quick. What’s the most expensive ingredient in beer? Hops? Yeast? Malt?
If you guessed none of the above, you’d be right. The real answer is taxes. Across America, taxes account for about 40 percent of your average brew. One big reason is a federal excise tax imposed after Prohibition to discourage consumption.
The Competitive Enterprise Institute points out that the beer industry in America supports more than 1 million jobs and $1 billion in economic activity. Here in the Empire State, beer directly accounts for more than 60,000 jobs. The point is that beer is an industry which is both important to our economy and way overtaxed.
Right now, there are two bills in Congress offering some relief. The Brewers Excise and Economic Relief Act would lower excise taxes across the board. The Small Brewer Reinvestment and Expanding Workforce Act would confine this relief to smaller brewers.
We see no reason to make our tax laws even more complicated by carving out special treatment for a preferred class, even if that happens to be the neighborhood microbrewer. Large breweries are important, too, employing thousands of New Yorkers who make, distribute and sell beer. Why should they have to pay if their competitors don’t have to? Especially since the small breweries wouldn’t suffer under the BEER Act. In fact, if you make less than 15,000 barrels, you’d pay no excise tax — good news for backyard brewers.
We support equal relief for all. And if Congress ever sobered up, it would surely realize the best and fairest course would be to get rid of this tax altogether.