As the craft beer and spirits industry has continued to grow over the past couple decades, industry advocates have argued that the taxation and other regulations surrounding these beverages should become less burdensome as well. To that end, earlier this year, a bill was reintroduced in both the House and the Senate: the Craft Beverage Modernization and Tax Reform Act of 2017. The proposed tax-cutting legislation has seen plenty of bipartisan support for its purported ability to continue to stimulate the brewing and distilling industry, but some health advocates are worried about its effect on another alcoholic beverage: wine.
Along with other boozy tax breaks, the bill would also raise the one of thresholds on ABV for taxing wine. Currently, the federal tax on wine at 14 percent ABV is significantly lower than the tax on wines with an ABV between 14 and 16 percent. The lower ABV wines are taxed $1.07 per gallon, whereas the higher alcohol wines are taxed at $1.57 per gallon. That difference is large enough that, currently, some wineries find ways to keep their ABVs down to avoid paying these stiffer taxes. Opponents of this provision say eliminating the tax differences will result in wineries selling stronger wine.
Alcohol Justice, a vocal anti-alcohol group (opposed to both booze consumption and advertising) wrote, “Since the break is meant to incentive vintners to keep their alcohol content low—even though many wines are ‘naturally’ higher—it increases the prevalence of higher alcohol wines overnight.” Of course, drinkers could also consume less wine, but Dr. Ana Baylin, an associate professor at the University of Michigan School of Public health, told the site Fair Warning, that is rarely the case. “If you increase the percentage of alcohol in wine 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,” she was quoted as saying.
Still, health ramifications aside, from a winemaker’s perspective, it’s a bit circuitous to spend money to reduce the amount of alcohol in your wines to save money on taxes for having higher alcohol wine. So as could be expected, wine industry groups like the Wine Institute are in favor of making life easier (and less expensive) for wine producers. As for wine drinkers, the change would be just be one more reason to read the label. Checking the ABV on your wines is certainly more helpful than reading a bunch of stock tasting notes anyway.