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SHARON English proposes reduction in federal excise tax on beer



Published: Wed, May 29, 2002 @ 12:00 a.m.



Congressman Phil English said 43 cents of every dollar spent on beer goes for taxes.

By HAROLD GWIN

VINDICATOR SHARON BUREAU

SHARON, Pa. -- Gene Rossi thinks rolling back the federal excise tax on beer is a good idea.

He said he and other bar and restaurant owners pay state taxes on that federal excise tax when they buy their beer from a distributor, and that's not fair.

U.S. Rep. Phil English of Erie, R-3rd, was at Billy's Black and Gold, a sports bar and restaurant on Sharpsville Avenue on Tuesday to tout his proposal to cut the federal excise tax on a barrel of beer from $18 to $9.

Several tavern owners were on hand to support his plan.

Rossi, who owns Our Gang's Lounge on Sharpsville Avenue with his wife, Susan, said that when he buys a keg of beer (a half-barrel) from a distributor at $42 to $48 each, that price includes the $18 federal excise tax.

Taxed again

Rossi said he also must pay a 6 percent state sales tax on the total purchase price, literally paying 54 cents in state tax just on the federal excise tax on each keg.

English, holding up a glass of Coors Light sold at Billy's for $1, said that 43 cents of that tab goes for taxes.

A big chunk of that is the federal excise tax enacted on beer in 1990 when the federal budget was running big deficits and needed more revenue, he said.

That 1990 excise tax also was levied on a variety of luxury items such as mink coats, luxury cars, private airplanes and yachts, but it has since been reduced on all of those items except beer, English said.

The rollback in English's House Bill 1305 would reduce the price of the average six-pack by about 16 cents, he said.

Opposition to bill

He acknowledged that Mothers Against Drunk Driving opposes the bill, but he disputed suggestions that such a small reduction in the price of beer will generate any change in behavior by those who drink it.

Those who abuse alcohol now won't be encouraged to do it more by a reduction in the excise tax, he said.

"It's a direct tax on working-class consumers," English said, citing statistics that show nearly two-thirds of the beer consumed in the United States is purchased by people with incomes under $45,000 a year.

The congressman said his bill has bipartisan support by a majority of the House and he will press the Republican leadership to schedule it for a vote.

Sen. Rick Santorum, R-Pa., has mustered bipartisan support in the Senate, but English said he doesn't know if it will pass there.

The bill would cost the federal government about $6 billion over a five-year period, but that's only a small part of the budget and can be made up from other sources, English said.

Passing on savings

He said he would expect the savings to be passed directly through to the consumers.

Bill Novosel, owner of Billy's Black and Gold, isn't sure how that will work for a person buying a beer over the counter.

He estimated the reduction will be about 4 cents a glass and said it may not be feasible to charge 96 cents for a glass of beer and then have to provide the customer with four pennies change.

gwin@vindy.com




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