[Congressional Record Volume 143, Number 114 (Wednesday, September 3, 1997)]
[Extensions of Remarks]
[Page E1642]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      HIGH BEER TAX HURTS COLORADO

                                 ______
                                 

                           HON. BOB SCHAFFER

                              of colorado

                    in the house of representatives

                      Wednesday, September 3, 1997

  Mr. BOB SCHAFFER of Colorado. Mr. Speaker, the tax on beer hurts 
Colorado's economy, helps no one, and ought to be rolled back. Congress 
should start by repealing the 100 percent beer tax hike it foolishly 
imposed back in 1990.
  Remember Joe Six Pack? Politicians used to invoke the name to conjure 
images of the average, hardworking, middle-class American. Joe Six Pack 
is the kind of guy who puts in an honest day's work to support a family 
and the mortgage.
  He loves his country. He plays second base on the softball team, 
cheers his kids in the school play, and prays before dinner.
  On Sunday, he barbecues burgers on the grill, kicks back to his 
mostly clean recliner, enjoys his favorite team on the T.V., and pops 
open an ice-cold can of beer.
  Ironically, Joe Six Pack isn't too fond of the politicians who like 
to talk about him--and with good reason. Joe is shelling out an 
incredible 43 percent of the cost of every beer he buys to the 
Government.
  In 1990, Congress passed one of the biggest tax increases in history. 
In fact, President George Bush, who helped engineer the deal, lost his 
job because of it. The tax hike included new taxes on yachts, private 
airplanes, expensive jewelry, furs, luxury cars, and it doubled the tax 
on beer.
  Since 1991, Congress has repealed nearly every one of these taxes, 
but the huge tax markup on beer remains, and American beer drinkers 
continue getting nickeled-and-dimed by the Government with every sip.
  Beer is big in Colorado. In 1995 Colorado's beer industry paid $53 
million in excise taxes. Forty-five thousand Coloradans hold beer-
related jobs earning nearly $1 billion in wages, accounting for a total 
economic contribution of $4.7 billion.
  Coors and Anheuser Busch are two of Colorado's larger employers but 
the State is also home to regional brewers, microbreweries, beer 
wholesalers, distributorships, 3,000 off-premise retailers, 6,000 on-
premise retailers, barley growers, and scads of other farmers who 
support the brewing industry. Yet much as brewing helps Colorado's 
economy, our fiscal performance could be even better.
  Simply put, excessive beer taxes have stifled the industry's growth 
slowing Colorado's economy. In fact, a 1996 economic analysis by DRI/
McGraw-Hill concluded that 50,000 new jobs would be created nationally 
by rolling back the 1990 beer tax.
  Beer was first subject to tax in 1862 as an effort to help finance 
the Civil War. Since then, significant increases coincided with World 
War I, World War II, and the Korean war. On three occasions the tax was 
actually reduced.
  Today, Congress is looking for ways to spend less in Washington so 
that Joe Six Pack's middle-class family can finally enjoy well-deserved 
tax relief. Consumption statistics clearly point to the beer tax as a 
prime target. Beer taxes hit lower-income families five times harder 
than upper-income families.
  Beer is one of the most highly-taxed consumer goods sold in America, 
taxed 50 percent more than for other consumer products. And the tax is 
terribly inefficient and unfair to consumers.
  Since Federal beer taxes are levied at the brewery, they are subject 
to wholesaler and retailer markup and to State and local sales taxes. 
Consumers are paying taxes layered upon other taxes, ultimately paying 
about $2 in increased cost for every $1 in tax.
  Some who support the high beer tax contend falling alcohol abuse 
rates favor the steep tax. Again, research dispels the notion that high 
beer taxes have anything to do with alcohol abuse rates, which have 
fallen steadily for over a decade.
  Long before Congress raised the beer tax, the beer industry itself 
had poured millions into personal responsibility campaigns aimed at 
youths and consumers.
  Americans heard the message and enthusiastically embraced it. But the 
increased tax had no measurable effect on the well-established positive 
trend toward more responsible alcohol consumption, and no effect at all 
on those who are disposed to alcohol abuse.
  Higher beer prices do not deter alcohol abusers who simply turn to 
more concentrated or cheaper products. Market research, instead, 
confirms that lower sales caused by higher taxes are attributed almost 
entirely to fewer purchases by responsible drinkers.
  This year, Congress heard the pleas of Joe Six Pack, that American 
families are over taxed and politicians must do more to control the 
Government's appetite for spending. We cut capital gains taxes, income 
taxes, and death taxes. We made it easier to afford a college education 
and save for retirement. It was a good first step.
  But while the 1997 tax cuts are an encouraging start, they are 
certainly not the full measure of adequate tax relief. Congress can do 
better.
  What's good for Joe Six Pack is good for Colorado, and good for 
America too. One of several taxes Congress should further cut to 
bolster economic growth is the beer tax.

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