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2015 U. Ill. L. Rev. 2141 (2015)
Taxing the Keg: An Analysis on the Potential Effects of Changing the Federal Excise Tax on Beer

handle is hein.journals/unilllr2015 and id is 2177 raw text is: TAXING THE KEG: AN ANALYSIS ON THE POTENTIAL EFFECTS OF CHANGING THE FEDERAL EXCISE TAX ON BEER BRYCE PFALZGRAF* Beer and the federal taxation of alcohol have brewed an interde- pendency in American history since the eighteenth century. In the last forty years, however, the advent of the craft beer industry has pro- foundly shaped the brewing landscape in the United States. In re- sponse to this change, Congress has proposed alternative pieces of legislation that would amend the Internal Revenue Code and the fed- eral taxation of beer: the Brewers Excise and Economic Relief Act (BEER Act) and the Small Brewer Reinvestment and Expanding Workforce Act (Small BREW Act). The BEER Act would make broad cuts to the existing excise tax, favoring large and small brewer- ies alike. The Small BREW Act, by contrast, would reform the excise tax modestly, benefitting small breweries only. This Note explores the future of the federal excise tax on beer and its potential impact on the brewing industry and society at large. It begins by detailing the history of brewing in the United States, as well as specific changes the BEER Act and the Small BREW Act would have on the existing excise tax. This Note will then perform economic analyses on the two acts using theoretical and comparative approaches. In doing so, it will detail the foreseeable impacts of the BEER Act and Small BREW Act and consider the health implica- tions of each proposed law. This Note urges that Congress adopt the Small BREW Act. The Small BREW Act's targeted tax cuts for small breweries will enhance market competition and foster sustained success of craft beer busi- nesses. Given its limited scope, the Small BREW Act will also mini- mize losses of federal excise tax revenues and curtail the health and societal concerns associated with this proposed tax reform. * J.D. 2015, University of Illinois College of Law; B.A. 2012, Economics, History, and Philoso- phy, University of Nebraska-Lincoln. To my friends and family, thank you all for your love and sup- port. I would not be who I am today without you. To my professors at both Illinois and Nebraska, thank you for your dedication, expertise, and inspiration. It is because of you I have such a deep ap- preciation for research, analysis, and writing. A special thank you to the editors and members of the University of Illinois Law Review who selected this Note for publication and for all of the effort it took to prepare it for print. Finally, a thank you to brewers for doing what you do and for making this Note possible. 2141

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