INDUSTRY ISSUE | Tax Proposal Prompts Swift ResponseJune 9, 2009 By: Donna Hood Crecca
The revelation that the Senate Finance Committee may seek funds to underwrite President Obama’s health care plan not only from increased taxes on beer and wine but also from higher levies on soft drinks has put lobbyists in high gear.
Beer, wine and beverages involving sugar and high-fructose corn syrup are at risk of federal excise tax increases, prompting opposition from involved parties ranging from farmers, sugar refiners and producers to industry associations such as the American Beverage Association, which represents soft drink manufacturers. Their voices joined those of beverage alcohol industry groups such as the Distilled Spirits Council of the U.S. (DISCUS), the Wine Institute and the American Beverage Institute, which vehemently oppose increased federal excise taxes on alcohol, viewing such taxes as regressive and damaging to the industry and the U.S. economy. The last federal excise tax increase on alcohol in 1991 resulted in the loss of 98,000 in the distilled spirits industry, nearly $1.3 billion in lost wages, and a total $1.1 billion reduction in personal and corporate income, sales and property tax revenue to federal, state and local governments, reports DISCUS. States paid out more than $150 million in unemployment benefits, according to DISCUS calculations.
On the other side are public advocacy groups, including the Center for Science in the Public Interest and medical professional organizations such as the American Hospital Association, both of which support increased taxes on beverage alcohol.
Editor’s Note: That non-alcohol beverages are being targeted for increased taxation along with alcohol sets the stage for what could be an interesting chess game. Will the soft drink industry align itself with its alcohol brethren in the fight or seek to hold itself separate?
But don’t sit still while watching the soft drink industry’s maneuvering. Everyone involved in the beverage alcohol industry also needs to voice their opinion on this issue. Visit www.axetaxesnotjobs.com or www.stophospitalitytaxes.com for information and to get involved.