Action Alert:  OPPOSE the Beer Tax Rollback (H.R. 1305)

On March 29, 2001, Rep. Philip English (R-PA) introduced H.R. 1305, a bill “to reduce the federal excise tax on beer to its pre-1991 level.”  The bill had 219 co-sponsors as of June, 2002, and the beer industry is now pushing to have the bill tacked on to other tax policy legislation that may have a chance of moving to the House floor. 

Reducing the beer excise tax is bad fiscal and public health policy.  Cheaper beer would contribute to increased underage and heavy drinking.  Worse yet, current federal and state taxes on alcoholic beverages don’t come close to offsetting the public health and safety costs of beer consumption.  If anything, beer taxes should be raised to help meet prevention, treatment, law enforcement, and other costs associated with excessive and underage beer drinking.  CSPI's Alcohol Policies Project opposes reducing taxes on beer.  CSPI is joined by Mothers Against Drunk Driving (MADD) and many other organizations in opposing the beer tax rollback.

Background:
Federal excise taxes on beer were raised in 1991 for the first time in 40 years. The tax was raised from $9 per barrel to $18 per barrel (or 16 cents per six-pack to 32 cents per six pack). The 1991 beer tax increase did not occur because of public health considerations, but was part of the overall budget deliberations between then-President George Bush and the Congress.  The legislation that was introduced in March, 2001 (H.R. 1305), would repeal the 1991 beer tax increase and roll the tax rate back to its1951 level. 

The beer industry is pushing hard for repeal of the 1991 tax increase. The beer industry argues that taxes comprise 43% of the cost of every beer. This “burden” actually includes sales and excise tax, federal income and payroll taxes, state and local income, payroll and other taxes. In reality, a six-pack of beer in some areas costs less than a six-pack of soft drinks.

Action Needed:
Beer wholesalers continue to lobby Congress to add new co-sponsors to this harmful legislation.  Please meet with or contact your Representative and express your opposition to H.R. 1305.  

1) If your Representative is a member of the Ways and Means Committee:  Your letter is especially crucial because the legislation must pass through this committee. [Link to sample letter]

2) If your Representative is listed as a co-sponsor of the legislation: Please express your disappointment that he/she is a cosponsor and urge him/her to withdraw  support immediately (note that two Congressman [Reps. Shows and Greenwood] have already  withdrawn from the bill). [Link to sample letter]  

3) If your Congressperson is not listed as a co-sponsor: Please thank them for withholding support and urge them to refrain from co-sponsoring this unwise bill.  [Link to sample letter]

PLEASE NOTE:  The quickest way to deliver correspondence to your Representative is by facsimile.  You can obtain your Member's fax number by calling his or her office (LOOK UP YOUR MEMBER BY ZIP CODE: http://www.congress.org/congressorg/dbq/officials/).

 Talking Points:

• Alcohol is the #1 drug problem among young people and beer is their alcohol of choice. Young people in this country consume approximately 10% of all beer sold. There are more  than 1.1 billion cans of beer consumed annually by underage drinkers. In 1999, 2,238 young people between the ages of 15-20 lost their lives in alcohol-related crashes, and thousands more were injured.
   

• Lowering the beer tax will worsen underage drinking. Beer will be more affordable to youth, who are especially price-sensitive. In some areas, the price of a six-pack of beer is already lower than the price of a six-pack of soda. According to the National Institute on Alcohol Abuse and Alcoholism, lower taxes and prices of beer will lead to higher levels and frequency of drinking among youth and increase traffic crash fatalities.
   

• Most Americans – including drinkers -- oppose rolling back the federal excise tax on beer.   An August 2001 poll conducted by Penn, Schoen, and Berland Associates, Inc. for Mothers Against Drunk Driving (MADD) and the Center for Science in the Public Interest (CSPI) found that when drinkers were told that the federal excise tax on beer was slightly over 5 cents per bottle, 62 percent said that beer taxes are about right or too low.  The vast majority of drinkers surveyed – 77 percent -- thought that a beer tax cut would benefit the beer industry rather than consumers.  Nearly 70 percent of drinkers surveyed thought it was "not very likely" or "not likely at all" that the beer industry would pass the savings on to consumers if the federal excise tax on beer were lowered.
   

• Beer tax increases save lives. Economists at the National Bureau of Economic Research have estimated that the 1991 beer tax increase, the first beer tax increase in 40 years, saves 600 young lives each year in reduced drunk driving crashes.
   

• Beer taxes and prices are LOW by historical standards. The current federal excise tax on a six-pack of beer amounts to approximately 33 cents. Had beer taxes kept pace with inflation since 1951, the date of the last major increase, the tax rate today would be more than one dollar.
   
• Only heavy beer drinkers currently pay more than a few cents per day, at most, in beer taxes. Fewer than 10% of beer drinkers drink 2 or more beers per day -- the heaviest drinking 20% of beer drinkers consume 80% of all beer.

Don’t be fooled by the Beer Institute and the Beer Wholesalers!
Beer taxes are popular and lifesaving – reject calls for a beer tax repeal.

June 2002

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