Helping those "small" businesses

transporter

Well-Known Member
...or not.


The frequent assertion that the tax cut is for craft brewers and distillers is misleading.

◦For every $20 of alcohol tax cuts in the legislation, only about $1 actually goes to the true craft brewers or small distillers.
◦Most of the revenue—the other $19—goes to larger producers and to importers. This is largely because of new or expanded opportunities to evade or avoid the limits on what qualifies for the lowest tax rates. For instance, it’s plausible that a third to one half of all distilled spirits sold in the U.S. will qualify for the reduced rate.
◦By allowing alcohol from foreign and large domestic producers to be passed off as “craft,” certain parts of the legislation may put America’s real small brewers and distillers at a competitive disadvantage.

The new law reduces the excise tax rate on the first 60,000 barrels of beer by 50 percent (from $7 to $3.50) no matter how small or large the brewer. It cuts the tax on the first 100,000 proof gallons of distilled spirits by 80 percent (from $13.50 to $2.70), and by 40 percent on the first 30,000 gallons of most wine (from $0.17 to $0.07 after the increased wine credit). Because these small producers are targeted with the biggest cuts, they must represent most of the revenue, right? Not true.

Small brewers (those producing less than 60,000 barrels) only produced 4.6 percent of all U.S.-made beer in 2016 (about 8 million barrels). And because they already benefited from a lower $7 per barrel tax, while most beer was taxed at $18/barrel, they accounted for only about $56 million in taxes or 1.5 percent of total beer tax revenues (including imports).[1] Cutting their taxes in half should only cost about $28 million.

The story is similar for distilled spirits.


https://www.brookings.edu/research/...cuts-mostly-foreign-and-industrial-producers/
 

GURPS

INGSOC
PREMO Member
This time, according to WI, tax reform promises to help grow 5,000 mainly family owned California wineries. It will do this by reducing excise taxes on small to medium-sized wineries between 55 and 70 percent (as an aside, WI mentioned the bill allows new product innovations, but did not elucidate--you'll have to read the bill). WI also claims the tax savings will produce more jobs.

The legislation allows a substantial wine excise tax credit on annual production up to 750,000 gallons. A winery producing 12,600 cases annually will save $3,000; 50,000 cases would save $21,000; 105,000 cases saves $184,200; and over 750,000 cases would save almost $452,000. It’s doubtful the smallest winery would save enough to hire many new workers, but the larger production winery just might. And for the first time, sparkling wine is included in the tax credits that allow the savings.

Like sparkling wine, still wine has been under higher excise tax requirements, when the alcohol by volume reached and exceeded 14 percent. The bill reduces that burden from $1.57 to $1.07 per gallon and it raises to 16 percent the alcohol by volume required for that extra tax to kick in.

The bill also decreases the tax on certain low-alcohol carbonated wines.

Brewers like the new tax bill, too.

Bob Pease, president and CEO of Brewers Association, a non-profit trade association of small and independent craft brewers:

"This is a monumental day for small and independent craft brewers. America's small, Main Street brewers-6,000 strong and located in every state and virtually every congressional district in the country-are incredibly pleased Congress has recognized that they have great growth potential.”

Some might say that running a country based solely on special interests is neither a productive nor fair way to treat a nation’s tax structure, but with seeming certainty, Pease goes on to say that small brewers will use their savings from the changed federal excise tax on beer to invest in their breweries by expanding operations and that will create more jobs. The revised excise taxes on brewers is estimated to save the brew industry over $142 million annually. Pease profusely thanks Congress for its largesse.



https://www.forbes.com/sites/thomas...rage-alcohol-producers-big-time/#584a050f5f22
 

GURPS

INGSOC
PREMO Member
At Politico, consistency has never been a strong point. Somehow, the just-signed tax law supposedly won't have that much of an effect on Americans' economic behavior, but there's no doubt that the bill's tiny cuts in taxes on alcoholic beverages will bring about disastrous results.

[clip]

Now let's read the next sentence from Faler carefully:

That translates to $1.6 billion in savings next year for MillerCoors; Diageo, the maker of such brands as Captain Morgan rum and Ketel One Vodka; and smaller beer and spirits operators that had pushed for the cut.

Faler should simply have written that the savings is for the entire alcoholic beverage industry. Instead, readers will think that only the entities listed plus the "smaller beer and spirits operators" will share the savings. Readers who work harder than they should have to can determine that the savings are industrywide. That's because Faler reported that "Last year, taxes on wine, beer and liquor raised $10.6 billion," and $1.6 billion divided by $10.6 billion is the reported 16 percent.

Continuing:

Beer makers now generally pay $18 per barrel, which translates to about 30 cents per six pack, though small producers pay $7 on their first 60,000 barrels. Beginning Jan. 1, brewers will pay $3.50 on the first 60,000 barrels, and $16 after that, up to 6 million barrels.

Pass the smelling salts.

A six-pack of beer might come down in price by a few pennies. Ignoring the small-production exemption, a $2 reduction in the $18 tax would translate to about 2.7 cents (30 cents times $2 divided by $18) per six pack. Given that six-pack prices start at about $5, and assuming that competition would cause the savings to be passed on to consumers, prices would come down by 0.54 percent or less.

There is also a 50-cent tax reduction on wine — per gallon.

The industry says that the tax reductions will give them the ability to invest more in their businesses and to hire more people. If they're right, that would help the economy expand, and prices wouldn't even fall by the minuscule amounts just discussed.



https://www.newsbusters.org/blogs/n...results-tiny-alcohol-tax-cuts-little-boost-15
 

GURPS

INGSOC
PREMO Member
Tax Bill Would Give Small Brewers A Big Break


Craft breweries might be about to crack open a celebratory cold one.

Under the Senate tax bill, alcohol producers would save $4.2 billion from 2018 to 2019, according to Congress' Joint Committee on Taxation.

The measure would help small-brewery owners like Kevin Sharpe, the founder and president of Dark City Brewing Co. He hopes to use the extra money to expand his business in Asbury Park, N.J.

"More money means better beer, and hopefully more of it," he said.

Sen. Rob Portman, R-Ohio, pushed for the provisions in the Senate Finance Committee, which will help breweries of all sizes.

"This legislation is only going to promote the expansion and the jobs that come with these entrepreneurial small businesses," he said.
 

stgislander

Well-Known Member
PREMO Member
But...but... TransJ said that the tax cut would only benefit the big brewers!!! Everybody else MUST be lying.
 

SamSpade

Well-Known Member
But...but... TransJ said that the tax cut would only benefit the big brewers!!! Everybody else MUST be lying.

My guess is that trans should consider taking his/her own advice - checking a news story from a variety of sources, instead of a biased one.
 

Gilligan

#*! boat!
PREMO Member
I'm out as soon as I see this utter BS in any article about taxes:
Cutting their taxes in half should only cost about $28 million.

Reducing what the government confiscates is not a "cost" to the government. That's our money.
 

GURPS

INGSOC
PREMO Member
My guess is that trans should consider taking his/her own advice - checking a news story from a variety of sources, instead of a biased one.



Frankly 'benefits' from tax breaks is a guessing game, until the numbers start coming in ...

it is all OPINION at this point, but hey don't let that stop the Trump Hate
 

This_person

Well-Known Member
But...but... TransJ said that the tax cut would only benefit the big brewers!!! Everybody else MUST be lying.

They look at dollars. "The top 1% are getting cuts of thousands of dollars, but the middle class are only getting cuts of hundreds of dollars." They do not take into account the fact that the top 1% pays millions, while the middle class pays thousands.

Instead of comparing apples to apples (percentage cuts), they compare apple juice to pomegranate juice, like it makes sense to do so. To be clear, it does not make sense to do so, which is why they do it.
 

SamSpade

Well-Known Member
Frankly 'benefits' from tax breaks is a guessing game, until the numbers start coming in ...

it is all OPINION at this point, but hey don't let that stop the Trump Hate

I'm not sure yet what my situation will be yet. A number of factors have to be considered.
My refund SHOULD go up if for nothing other than the Child Tax Credit. Withholding should cause my paycheck to rise, but my life insurance and healthcare premiums are also rising so...?

I'll see. That's the weird thing about predictions - they're proven true or false by reality unless it's politics.
 

SamSpade

Well-Known Member
They look at dollars. "The top 1% are getting cuts of thousands of dollars, but the middle class are only getting cuts of hundreds of dollars." They do not take into account the fact that the top 1% pays millions, while the middle class pays thousands.

That's the thing about math and statistics - without a fair understanding of what they represent, they can fool anyone.
The biggest companies are big enough that the small businesses could get all of their taxes back and it would still be a pittance in comparison.

Ditto the "cost" of the tax cut. The given number is 1.5 trillion.
Over ten years.
Or 150 billion a year.
Out of an approximate 4 trillion dollar budget.
Or just under 4%.

NOW - if they said, this will increase costs by 4% a year - who would go ape-#### over THAT?
 

Starman

New Member
I'm out as soon as I see this utter BS in any article about taxes:

Reducing what the government confiscates is not a "cost" to the government. That's our money.

It certainly is not. It says so right on the bills: “FEDERAL RESERVE NOTE”.
 
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