In the aftermath of its failure to pass a health-care overhaul, Congress appears poised to turn to tax reform. While income and corporate tax rates will likely garner most of the attention, alcohol producers are also hoping for changes to booze taxes. Specifically, brewer, vintners, and distillers have been pushing on Capitol Hill for the Craft Beverage Modernization and Tax Reform Act, which would lower federal excise taxes on alcohol.
Despite attracting nearly 300 co-sponsors in the House and more than 50 in the Senate, the bill has failed to get a vote in recent sessions of Congress. There’s renewed hope for the act this year—perhaps as part of a larger tax overhaul—but the current version of the bill is missing a key feature of previous iterations: the legalization of home distilling. Whereas the 2015 version of the act included a provision that would have permitted distillation of up to 24 proof gallons per year for personal consumption, that provision has been stripped from the new version of the bill.
Americans Can Already Brew Some Kinds of Alcohol
Treating home distilling as illegal makes little sense, given that homebrewing and wine making have been legal at the federal level since 1978, when President Jimmy Carter signed legislation allowing Americans to produce limited amounts of beer and wine for personal consumption. Nearly 40 years later, many beer industry analysts have argued that Carter’s home brewing reform was a key factor in the meteoric rise of the craft beer movement.
In 1978, the United States had fewer than 200 breweries. Today, there are more than 5,000 breweries nationwide, with the vast majority being craft breweries. These numbers should come as little surprise, since legalizing homebrewing encouraged a generation of wannabe brewers to experiment and perfect their craft in basements and garages around the country. While it’s hard to know the exact number, it’s believed that up to 90 percent of craft brewers started out as homebrewers.
Despite the home distilling ban, a craft spirits industry eventually did bloom, albeit much later. Since 2007, craft distilleries in America have tripled, currently sitting at well more than 1,000 nationwide. Even if this rise hasn’t been quite as impressive as the craft beer industry, the question remains as to how spirits have managed to thrive in the absence of legalized home distilling.
The answer is almost certainly illegal distilling. As Esquire has noted, newly opened craft distilleries across America show a sophistication of technique and skill that could only have been refined by the trial-and-error of home distillation efforts. Distilling at home has also become easier than ever, given the wide variety of distillation equipment now available for purchase online. Often, websites that sell distillation products operate under the ruse that buyers use such equipment to filter water or make “essential oils.”
Legalizing Home Distilling Is a Win-Win
This entire legal structure no longer makes sense, if it ever did. Allowing home distillation in limited amounts for personal consumption is the closest thing to a win-win as you can find in the policy arena. It would move current home distillers out of the shadows, since they would no longer be engaged in a technically illicit activity.
It also would encourage experimentation with creative flavors and techniques, which could further spur the commercial spirit industry in much the same way that legalizing homebrewing did for beer. Finally, as the R Street Institute’s Kevin Kosar has pointed out, anything that grows the spirits industry should be encouraged by policymakers, as alcohol manufacturing creates middle-class jobs.
Admittedly, there may be legitimate concerns about safety, although the process is not as different from brewing as many might imagine. Now more than ever, there are ample explainers and how-to guides available on YouTube and elsewhere across the Internet showing would-be distillers how to distill hard spirits safely and effectively. To the extent that safety is a concern, it makes more sense to legalize and responsibly regulate the practice, rather than continue to let it take place underground.
One roadblock to legalization could be incumbent commercial distillers, who might oppose efforts to legalize home distilling—perhaps in fear of additional market competition should those home distillers someday start commercial distilleries. Such thinking is shortsighted, however, since the benefits of legalization would be a clear boon to the industry overall. It would gin up interest and excitement in spirits, much like home cooking has sparked a generation of foodies.
Many of America’s alcohol laws are holdovers from a bygone era. Congress should do its part to modernize these laws by taking the long-overdue step of legalizing home distilling. Today’s home distillers deserve the same treatment as homebrewers.