Editorial: Do not Increase Federal Taxes on Brewers and Distillers Opinion

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 Editorial: Don't Raise Federal Taxes on Brewers and Distillers Opinion

When it comes to special favors, Congress can safely hand them out. And no one can get as much grief from handing them out as Congress.

Do you remember the bridge to nowhere? It was used to beat the Congress pork keg policy. It was actually a bridge from Ketchikan, Alaska – with around 8,000 residents – to Gravina Island – with far fewer residents. The island also has the region’s airport. Not exactly a bridge to nowhere.

Another congress practice can be sharply criticized. In congressional jargon, they are referred to as tax expanders. These are tax breaks that are inserted into invoices. They can be aligned closely. For example, there was a horse owner that allowed him to write off the total investment in the time it would take horses to get a chance at the Triple Crown. Bundles of such tax breaks given by different members of Congress are usually bundled into one large package for them to exist.

Oregon’s Senator Ron Wyden, a Democrat, recently received some attention for a tax break he had drawn up for small breweries and wineries. It was included in this year’s invoice package at the end of the year. It could be in jeopardy because President Donald Trump is dissatisfied with some aspects of the package despite not naming it.

So is this tax break an undeserved special favor for a niche industry? It certainly doesn’t seem like that.

The provision provides for a permanent reduction in excise duties for manufacturers of beer, wine and spirits. It was first introduced by Republicans in 2017. Wyden wanted to make it permanent.

It’s easy to see why. Craft distillers pay a federal excise tax of $ 2.70 per proof gallon on the first 100,000 proof gallons they produce. From January 1st it is expected to increase by 400%. And craft brewers who brew less than 2 million barrels – that includes your favorite Oregon craft brewer – pay $ 3.50 a barrel. After January 1st this will also be doubled.

Wyden’s idea would prevent that. He drafted the law on the modernization and tax reform of craft beverages. The most important provisions were integrated into the tax renewals at the end of the year.

Breweries are bright spots in American manufacturing. They create jobs. And unlike many other ways of manufacturing in this country, they have grown. Some economic research suggests that the tax breaks brewers received resulted in more jobs and lower prices for consumers.

If Congress doesn’t act, one of the bright spots of American manufacturing during the pandemic will be hit by a major tax hike. That wouldn’t make sense.

It’s not always bad for Congress to highlight special treatment for the right cause. Do you know what else has received special attention because members of the Oregon Congressional Delegation have included them in packages in the past? Central Oregon Community College got money. An expansion of Redmond Airport has been funded. La Pine got money for a senior center. Madras got money for a labor training center. We don’t know what you think of the way money has been spent. For us, Congress and President Trump should support Wyden’s efforts.