When the budget came out, no such major change was included. There was a tiny change proposed, allowing IRS investigators to work on excise tax violations of alcohol law.
The Wine Institute was ready anyway with a letter (at left) signed by seven US Senators opposing the change. I'm not a tax expert, so I decided to look into it and find out why.
Two weeks later, I finally have the answer. I'm going to quote the email I got exactly, which I may only credit to "an administration official on background:" (but really, it's Michelle ... kidding)
"The Alcohol and Tobacco Tax and Trade Bureau (TTB) in Treasury currently collects alcohol excise taxes, but they do not have the manpower to initiate enforcement investigations. Last year, both the House and Senate included funding for TTB to hire agents to enforce the collection of these taxes. Rather than have TTB start a new agent cadre, the Budget proposes to allow existing IRS agents to enforce this provision on the behalf of TTB. This is not a new tax, just the enforcement of an existing one, and the Budget tries to enforce compliance in the more efficient way."
That makes sense to me and I don't really understand why the Wine Institute and seven US Senators oppose it.
Nor will I. The Wine Institute refused to answer my questions about it, saying only (again "on background," not from a quotable source) that "we don't think the proposal has a chance of being approved." Cocky.
I contacted the offices of my two Senators who signed the letter, Dianne Feinstein and Barbara Boxer. Feinstein asks me regularly for campaign contributions for herself and other Democrats, but her staff could not be bothered to respond to a question about a political issue. Ditto Boxer, who at least doesn't come begging to my inbox every month. I have to wonder if Feinstein and Boxer are even paying attention to what they allow their names to go on.
I will be interested in seeing how it plays out. In the very big picture, of course I stand with the Wine Institute on most political issues. That said, I wonder if this sort of arrogance, both in reflexively opposing a minor change and refusing to explain why, might eventually backfire.
Moreover, one area where true wine lovers' interests diverge from that of the Wine Institute is that the latter always stands for big business in wine because that's where the majority of its financial support comes from. Usually wine lovers' interests in US law coincide with Gallo's interests, but not always. Could this excise tax enforcement proposal be one of them?
I'll admit again, excise taxes aren't my specialty. Considering the lack of information I got from the Wine Institute on this, I'd be grateful if some of you reading this could explain further why the Obama administration's proposal would be bad for wine, your winery, or the industry as a whole. Thanks.