On Dec. 5, 1933, at 6:55 p.m., with the ink still drying on the 21st Amendment repealing Prohibition, President Franklin Roosevelt reportedly turned to his aides and said, “I believe this would be a good time for a beer.”
Roosevelt had good reason to personally celebrate Repeal Day. Ending the terrible experiment of Prohibition was a core message of FDR’s presidential campaign. By collecting taxes on alcohol, Roosevelt proposed to increase revenue for his federal work programs and help end the Great Depression.
Repeal Day ushered in two critical components of the alcohol industry that are still with us 80 years later: beer taxes, and the three-tier system of production, distribution and sale of alcohol.
Back then, beer taxes were not enough to end the Great Depression. Today, there are some who would still try to close the federal deficit on the backs of everyday beer drinkers, despite the fact that taxes are beer’s most expensive ingredient.
On average, more than 40 percent of what consumers pay at retail for beer goes to taxes of some kind – a mix of federal, state and local taxes. In 2012, more than $49 billion in taxes were collected from the production, distribution and sale of beer in the United States.
As an industry, we support fair taxes. But we also believe beer drinkers already pay more than their fair share of taxes. That is why the Beer Institute supports the BEER Act, co-sponsored by Sens. Mark Udall (D-Colo.) and Roy Blunt (R-Mo.) in the Senate, and Reps. Tom Latham (R-Iowa) and Ron Kind (D-Wis.) in the House.
The BEER Act would reform federal excise taxes on beer, and roll back the tax to historic, reasonable rates of $9 per barrel. It would take the extra step of extending a tax cut to small brewers, completely eliminating the federal excise tax on brewers of less than 15,000 barrels annually, which make up more than 90 percent of all brewers in the U.S. today. Brewers of up to 2 million barrels annually, that already pay less than half of the federal excise tax on their first 60,000 barrels, would also see a further reduction under the BEER Act, from $7 a barrel to $3.50.
We believe the BEER Act offers members of Congress a fair, equitable and comprehensive way to support all beer drinkers, and ultimately all brewers, without having to pick winners and losers within the industry.
The other legacy of Prohibition is the three-tier system of production, distribution and selling alcohol. An efficient balance of control between the federal and state levels, and among the industry tiers of production, distribution and sale, means that today we have a healthy, orderly and lawful marketplace for beer consumers. It is hard to imagine another consumer product industry that matches the consumer safety and quality-production standards as beer.
But brewers and beer importers have gone beyond what is asked of them, and have invested in their commitment to responsibility.
Every member of the Beer Institute adheres to our Advertising and Marketing Code, a framework for self-regulation that means no brewer or beer importer is purposefully going to advertise their brands to underage consumers, or portray beer in an irresponsible manner.
Today, there are literally hundreds of prevention, education and safe-driving programs supported by brewers and beer importers, in nearly every community. These messages are aimed at ending drunk driving and erasing underage drinking. These efforts are working, with federal statistics showing us that drunk driving and underage drinking are near historic lows.
We take our responsibility programs seriously. The two million American men and women either directly or indirectly employed by beer are parents and neighbors themselves. They are part of a historic industry that pays taxes, supports jobs and invests in consumer safety.
So as you consider how to celebrate Repeal Day this year, we ask you to consider opening a beer to America’s brewers and beer importers. More than ever before, our industry is making a difference through its commitment to responsibility, job creation and contributions to the economy.
McClain is president of the Beer Institute.