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Prepping for Fall Activity

August 12, 2009 By: Distilled Spirits Council of the United States


Editor’s Note: Congress may be on recess, but our industry must stay vigilant and continue communicating with representatives to thwart further taxation of the hospitality industry to finance proposed initiatives. DISCUS offers the following update and ideas for making the industry’s position known.


As the Senate approved Sonia Sotomayer's nomination to the Supreme Court and headed into a month-long recess late last week, little movement on health care occurred over the course of the week.

Before adjourning, President Obama met with members of the Senate working group on health care reform, which includes Max Baucus (D-Mont.); Chuck Grassley (R-Iowa); Kent Conrad (D-N.D.); Jeff Bingaman (D-N.M.); Olympia Snowe (R-Maine); and Mike Enzi (R-Wy.). The meeting did not yield any major breakthroughs, but the senators plan to continue negotiations over August recess. Chairman Baucus hopes to conclude negotiations and release a bill by Sept. 15 and then move to full committee consideration. It's unclear whether these negotiations will produce a bipartisan product. The working group has yet to reach consensus on major issues, including how to craft a government-funded plan, how to create an independent commission that sets physician payment rates, how to expand Medicaid and how to finance the overall cost of the legislation.  

Once the Senate Finance Committee completes its work, it will need to reconcile the differences from the bill approved by the Health, Education, Labor & Pension Committee, which will likely be significant. Full consideration on the Senate floor likely will drift into October.

The House Energy & Commerce Committee is expected to work to complete its bill the week of Sept. 7, while House Democratic leadership is still working to balance concerns from various factions of the caucus. They have announced plans to schedule a floor vote in early October, but that deadline could slip as well.

Please encourage your member of Congress and U.S. Senators to visit your establishment during the month of August and underscore your opposition to any effort to increase alcohol and food taxes.

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 product 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.        

Let’s hope sales improve in August. We’ll return in September with regular weekly updates. For additional information on how to contact your legislator, go to www.StopHospitalityTaxes.com.
 


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