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Discus Update: Alcohol Taxes to Fund Healthcare Reform?

July 15, 2009 By: Distilled Spirits Council of the United States


Congress returned from recess last week and resumed work on health care reform.  Although legislation was expected to move through each respective chamber over the next two weeks, progress has stalled. Senate Finance Committee Chairman Max Baucus, D-Mont., and House Ways & Means Committee Chairman Charlie Rangel, D-N.Y., held numerous closed-door sessions with rank and file members throughout the week. Their primary challenge remains over how to fund the enormous cost required to enact the legislation and how to structure a government-run plan.

It is still unclear whether alcohol taxes will be raised to finance the cost of the legislation. The chairmen claim they have found numerous savings in Medicare and Medicaid spending, but they still are looking for approximately $300 billion in new revenue. Anti-industry advocacy groups are pressing for increased taxes on alcohol and a new excise tax on soda. 

It is imperative that legislators hear from home state constituents. Contact your U.S. senators and representative and ask them to oppose taxes on alcohol and sodas. When doing so, please consider raising the following points:

  1.  Simply put, an alcohol tax is nothing more than a hospitality tax! The hospitality and leisure sector cannot withstand additional taxes. Since May 2008, unemployment now stands at 11 percent and more than 525,000 jobs have been lost.
  2. The nation’s hospitality industry derives a substantial portion of its jobs and sales from beverage alcohol. Restaurants that sell spirits, beer and wine earn on average more than 25 percent of their income from alcohol sales.
  3. Beverage alcohol is among the highest taxed consumer products in the U.S. Direct taxes on beverage alcohol account for more than one-third of the shelf price of distilled spirits, beer and wine. Government at all levels collects twice as much in taxes than those who produce, distribute and sell combined make in profits.
  4. Hospitality taxes penalize responsible, middle-income consumers. The federal excise tax on beverage alcohol is one of the most regressive taxes imposed on any American product. Half of beverage alcohol is consumed in households with less than $50,000 in annual income.

For more information on how to contact your legislator, visit http://www.stophospitalitytaxes.com. – DISCUS


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