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05/12/2017

Public Health Advocates Take New Notice of Tax Reform Bid (excerpt)

Just as public health researchers/advocates apply familiar arguments regarding negative effects of pot availability (see last Update), alcohol excises taxes and movie placements continue to attract their attention.  Actually, resistance from public health to the industry-wide attempt to reduce federal excise taxes on beer, wine and spirits – via the Craft Beverage Modernization and Tax Reform Act – has been relatively muted so far.  But Alcohol Justice and the Center of Alcohol Marketing and Youth have taken note.  Interestingly, they recently targeted the proposed tax break for vintners, who traditionally escape the advocates’ wrath, more often directed toward brewers and distillers.  But “Tax Break for High-Alcohol Wine Sours Health Advocates,” fairwarning.org headlined earlier this week.

The article quotes veteran public health advocates from the aforementioned groups, Michael Scippa and David Jernigan, respectively.  They (and others) criticize the proposed tax bill for reducing the federal tax on wine over 16% ABV from the current level of $1.57 per gallon to $1.07 per gallon, the same rate currently assessed on wines of 14% or lower ABV.  The proposal “has health advocates seeing red,” the investigative reporting organization could not resist noting.   Indeed, “overnight, people would have about 18% more alcohol in the same glass of wine they’re now drinking. The health implications of that are serious.”  So warns Scippa.  Why’s that?  Some vintners now reduce the ABV of their wine to avoid the higher tax, according to the article.  But, with the tax change, “there would no longer be a financial incentive” to do that.  Industry members support the bill as financial stimulus, primarily to ease financial burdens on smaller producers so they can expand their businesses.  But the problem is that alcohol is “not an ordinary product,” reminds Jernigan, “it’s...a product that kills 88,000 people a year in the US.”  Another public health professor opines that if alcohol content in wine increases “and people are used to a certain volume, I really doubt that they are going to correct their usual volume based on the increased percentage.”

Another issue for Jernigan: “consumers don’t get the information they need to make informed decisions about drinking.  One way that that information currently comes across is through the tax code because the tax code prices differently wines of different strengths.  Now they’re going to lose even that.”  Yet, how many consumers even know that higher strength wines are taxed about a dime per bottle more than lower strength wines?  And to how many could that dime possibly make any difference at all?

Publishing Info

  • Year: 2017
  • Volume: 34
  • Issue #: 16
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