Jordan Weissmann at The Atlantic picks apart the Brewers Association‘s push for lower excise taxes. I have heard that his opinion is shared by not a few craft brewers perplexed by the association’s push right now. (Warning: If you’re for the tax cut, this makes particularly brutal reading, beginning with the headline, “Drunk Math.”)
Weissmann basically spells out why the tax break is unnecessary, especially at a time when the nation’s running monstrous deficits and so many people are struggling financially:
Craft-brewing is already growing at a breakneck pace. Business was up 15 percent by volume in 2012, even though U.S. beer sales have been basically flat for two years now. According to the Brewers Association, the industry’s chief lobbying group, 409 small breweries and brew pubs opened their doors last year. Another 1,200 are supposedly in the “planning stages.” You’d have to squint really, really hard to see the strains imposed by taxes.
Whatever economic benefits the Small BREW Act might bring, they would probably be far more modest than the industry claims. In an analysis conducted last year for the Brewers Association, Harvard Kennedy School professor John Friedman estimated that the tax cut would cost Washington just $86 million dollars over five years, yet somehow generate $883 million in economic activity — a multiplier of more than 10-to-1.
If that were true, it might make tax-breaks for micro-brewers the single most powerful economic stimulus the United States has ever known. More likely, it’s just a bit of drunk math.
According to The New York Times, the Brewers Association doesn’t expect the tax change to happen outside of any broader tax changes. Stay tuned.
· Drunk Math: Why Tax Breaks for Craft Brewers Make No Sense [Atlantic]
· Riding Wave of Popularity, Craft Brewers Ask Congress for Tax Cut [NY Times]