The Herald, Sharon, PA Published Wednesday, May 29, 2002

SHARON

English puts a head on proposal to cut federal excise tax on beer

By Tom Fontaine
Herald Staff Writer

Working-class tax reform never tasted so good.

U.S. Rep. Phil English stopped Tuesday at Billy's Black & Gold Bar in Sharon to outline a proposal to roll back the federal excise tax on beer.

The proposal, which is co-sponsored by a majority of the House, would reduce federal taxes on kegs of beer from $18 a barrel to $9 a barrel, said English, Erie, R-21st District. If you don't buy beer by the barrel, those savings could translate to about 16 cents on every six-pack, English said.

"Nearly two-thirds of the beer consumed in the U.S. is purchased by people earning less than $45,000 a year. The hidden tax on beer hits lower-income families five times as hard as upper-income families," said English, a House Ways and Means member who is a prime sponsor of the bill.

An excise tax on so-called luxury items was passed by Congress in 1991 to help pay down the federal deficit. Beer somehow was lumped in with items like yachts, private jets and mink coats. "Since then, the excise tax on all of these luxury items has been repealed, except on beer," English said.

English estimated that about $6 billion in federal beer taxes would be lost over the next five years if the tax were repealed, but it is not "earmarked revenue" and is "chump change" by federal spending standards. He expected Congress could find ways to make up the difference.

"Few taxes are as regressive and inherently unfair as the beer tax, which fall overwhelmingly on average Americans," English added.

English, holding up a $1, 12-ounce draft of Coors Light as a prop, said 43 cents of every dollar spent on beer goes toward taxes. English did not drink the beer.

While English focused his outline of the bill as tax relief for Joe Six Pack, it would provide perhaps the biggest relief for distributors and bar owners who sell Joe the six packs.

On a good week, Billy's orders about 10 kegs, according to owner Billy Novosel.

At that clip and under the numbers provided by English, the bar could save more than $4,000 annually on federal beer taxes alone. The bar also would spend less money on state sales taxes -- 6 percent tacked on to the total cost of a barrel, which includes federal taxes.

English said Mothers Against Drunk Drivers and other interest groups have already expressed displeasure with the legislation, but he said the bill does not promote binge drinking and that the current Congress has been "committed to fighting the abuse of alcohol," citing attempts to lower the legal blood-alcohol limit to combat drunken driving.

And Gene Rossi, owner of Our Gang's Lounge in Sharon, added: "We as business owners are still responsible for our customers." Rossi said he does not expect beer prices at the county's 150-plus bars and restaurants that sell alcohol to drop much as a result of the legislation, if it passes the House and Senate.

"It's not going to affect them too much. Prices here are already reasonable, and our profit margins are narrow already," he said.



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