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I asked on Friday, “Does Congress hate small breweries?” The answer, it seems, is no.
Members of the Senate Finance Committee, who are considering changing the way alcohol is taxed to raise money for health care reform, sent out a press release this morning that indicates they haven’t forgotten about microbrewers and other small businesses. The downy-soft headline, “Lawmakers Concerned About Unfair Penalties on Small Businesses.”
The release doesn’t have any policy information, but — as with the original proposal — it’s a heads-up on what’s to come. A draft of the actual health care bill, which will contain specific policy details, is expected to come out this week. It seems like this release is a placating head-pat for fuming bloggers like me, and hopefully an indication that any changes in alcohol tax code will preserve the existing breaks for microbrewers.
Here’s an excerpt from the press release, before they get too lovey-dovey on Joe the Small Business Owner:
Washington, DC — Bipartisan lawmakers from the Senate Finance Committee and House Committee on Ways and Means sent a letter Friday to Internal Revenue Service (IRS) Commissioner Douglas H. Shulman, requesting assistance while Congress works to address certain penalties assessed on small businesses. The lawmakers are seeking to help small businesses that invested in listed tax shelter transactions that generated modest tax benefits, but resulted in tax penalties significantly larger than the tax benefits received.
In the letter, Senate Finance Chairman Max Baucus (D-Mont.), Ranking Member Chuck Grassley (R-Iowa), along with Ways and Means Oversight Subcommittee Chairman John Lewis (D-GA) and Ranking Member Charles Boustany (R-LA) point out that such disproportionate consequences were unexpected at the time the penalty was enacted, and they expect to introduce legislation that would result in penalty amounts in better proportion to the tax benefits. While the penalty has helped IRS end many abusive deals, many of the shelters being examined by the IRS involve significantly smaller dollar amounts, and current penalty levels may be excessive in some circumstances.
Photo by Cliff1066 via Flickr, Creative Commons