Once again, Big Liquor is knocking on Congress’s door, asking for a handout paid for by hardworking American taxpayers. The latest ploy comes in the form of two bills in Congress — S.1781 and H.R. 4073 – which are disguised as innocuous trade and tax policy reforms, but in reality, are special interest gifts to an industry with big lobbyist muscle.
Essentially, these bills would create a zero percent effective tax rate for multi-national liquor companies importing certain foreign-produced spirits products. This isn’t just a loophole; it’s a cavernous gap in our tax system, quietly pushed by the hard liquor special interest lobby in hopes of slipping through unnoticed in an omnibus package. That’s often how lobbyists get special gifts for their clients; they sneak special carveouts and loopholes into larger “must pass” bills. No one notices, but clients get rich … often at our expense.
Opposition to S.1781 and H.R. 4073 isn’t just about fiscal responsibility; it’s about fairness. While Big Liquor stands to gain billions in tax breaks, American small businesses are left behind. Current rules prevent most commodities from being offset unless their Harmonized Tariff Schedule (HTS) codes match. American bourbon and Irish whiskey, with their distinct HTS codes, can’t offset each other, yet Big Liquor wants to change the rules to benefit themselves.
Confusion is the lobbyist’s best friend. By exploiting the convoluted U.S. tax code, the Big Liquor Lobby aims to shift the burden of their taxes onto hardworking Americans. It’s a cynical game that we can’t afford to let them win.
And let’s not forget, this isn’t Big Liquor’s first rodeo. In 2020, they scored a generous tax break with the Craft Beverage Modernization and Tax Reform Act, while loopholes like the rum cover-over, which provides a tax break for Big Liquor companies that produce products in the Caribbean, and the 5010-flavor credit, which gives them a tax incentive to dilute hard liquor with wine or flavorings, continue to line their pockets at the expense of taxpayers and U.S. territories.
Now, with S.1781 and H.R. 4073, Big Liquor is once again angling for special treatment. But these bills aren’t just special treatment; they’re earmarks, plain and simple. By definition, earmarks benefit a select few at the expense of the many, and these bills would line the pockets of a handful of global liquor giants.
Enough is enough. Congress must stand firm against these blatant attempts to rig the system in favor of Big Liquor. Taxpayers shouldn’t foot the bill for corporate greed, and American small businesses deserve a level playing field. It’s time to put an end to these kinds of games and ensure that Big Liquor pays its fair share.
Big Liquor companies have taken advantage of the U.S. tax system for far too long. It’s time for Congress to say no to another handout and yes to fairness and fiscal responsibility. Pennsylvania’s federal delegation, especially Rep. Lloyd Smucker (PA-11), should take the lead in shutting down this Big Liquor special interest payoff.
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