Abolish the Federal Alcohol Tax and Regulation System
When the 21st Amendment was ratified in 1933, ending America’s “noble experiment” with nationwide alcohol Prohibition, it supposedly meant the federal government was getting out of the business of regulating booze. But few governments willingly give up power, and even fewer give it up absolutely.
In 1935, Congress passed the Federal Alcohol Administration Act (FAA Act), allowing the feds to collect alcohol excise taxes, prevent unfair trade practices, and protect consumers. Determining which agency should administer the FAA Act has been quite a journey—the Internal Revenue Service; the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF); and, for the last 21 years, the Alcohol and Tobacco Tax and Trade Bureau (TTB) have all taken turns. But one thing hasn’t changed: The FAA Act still remains the main authorizing legislation empowering the federal government to regulate alcohol markets.
One of the TTB’s main responsibilities is enforcing the FAA Act’s unfair trade practice rules, which are intended to protect alcohol retailers from being controlled by large alcohol producers that might exercise monopolistic powers. This authority is derived from Section 205 of the FAA Act, which is a mere 907 words—meaning the TTB is currently policing the commercial trade practices of a $300 billion industry based on statutory language that is nearly a century old (with a few minor updates over years) and around the length of a newspaper op-ed.
The Biden administration recently drew upon these provisions to instruct the TTB to undertake a roving review of the industry under the guise that there could be antitrust concerns and too much concentration in the alcohol marketplace. Not only is this problematic in that the TTB is aggressively using an outdated and sparsely worded statute to contemplate aggressively beefing up its regulatory posture toward the
Article from Latest
The Reason Magazine website is a go-to destination for libertarians seeking cogent analysis, investigative reporting, and thought-provoking commentary. Championing the principles of individual freedom, limited government, and free markets, the site offers a diverse range of articles, videos, and podcasts that challenge conventional wisdom and advocate for libertarian solutions. Whether you’re interested in politics, culture, or technology, Reason provides a unique lens that prioritizes liberty and rational discourse. It’s an essential resource for those who value critical thinking and nuanced debate in the pursuit of a freer society.
