What's Happening in Washington

By Cary Greene

It’s been a hectic month in the nation’s Capitol, and most of the action has been good for America’s wineries.  The “fiscal cliff” bill included a provision that provides reasonable protection for families looking to pass their businesses to the next generation, agricultural labor reform is back on the agenda, and the Senatehas plans to draft a budget for the first time in years and could give us a clear window into their plans on excise tax rates.

Estate Tax Compromise

Until a last minute compromise included in the “fiscal cliff” law, Estate Tax rates were set to revert to a 55% rate on estates ofonly $1 million or larger. The compromise changes the maximum rate to 40% on estates larger than $5 million, indexedto inflation.  Indexing is important because it ensures that estates subject to the tax remain equivalent in value to a $5 million estate in the base year, or 2010.  While the compromise is certainly not full repeal, it remains far better than the alternative.

Agricultural Labor Reform

With Congress focused on immigration, wineries have a unique chance to work with our partners in the agricultural community to improve our laws governing immigrant labor.  WineAmerica remains a part of the Agriculture Coalition for Immigration Reform (ACIR), but is also in the process of joining a new coalition, the Agriculture Workforce Coalition (AWC).

If we hope to achieve lasting success on agricultural labor reform, American wineries need to try to speak in unison with the larger agricultural community.  WineAmerica agrees with AWC’s proposal for dealing with reform, and we concur that laying out our principles and being flexible on the specifics is the right way forward.  With the Senate advancing ahead with its plan for comprehensive immigration reform, WineAmerica wants to make sure we’re part of the solution.

Senate Budget

If the Senate proceeds ahead with a crafting a budget, which seems likely at this point, it will provide WineAmerica with a window into their plans on excise taxes and the future of TTB.  As we noted early last year, federal budgets tend to be the place where the ghosts of bad policy reemerge before being introduced as actual proposals.  While budgets set priorities, they don’t make law.  This makes them ideal policy navigators.  WineAmerica typically pays close attention to three budget items (1) plans for excise tax rates, (2) plans for industry “user fees”—assessing the industry for the cost of mandatory regulation, and (3) TTB funding levels—to determine TTB’s ability to ensure timely approvals, formulas, and licenses.  We will be paying attention to all three items as the Senate begins its drafting process, and will do our part to ensure that the Senate’s priorities help American wineries.