Taxman Drinketh

My neighbors to the north in Washington state are suffering from a rash of hysteria that has replaced reasoned discourse in our society. The culprit – a flare-up in the culture wars? The question of extending constitutional rights to suspected terrorists? Nope and nope, at issue is whether to tax candy bars. “Why do you want to tax one of life’s small pleasures in a time of economic hardship”…This sentiment is not being conveyed from Tom Joad Fellow from the Institute of Simple Treasures but one of the many Chamber of Commerce/lobbyist types that has descended on Olympia on behest of the candy manufacturers of America to shape this debate.

The proposal is not a brand new tax cut from whole cloth, rather a question of how to apply the current sales tax. Washington state does not currently tax food - 45 states levy a sales tax, but only 2 Mississippi and Alabama fully tax food. 11 other states have reduced the percentage people pay on food purchases and 6 states leave the question of taxing food to municipalities. By extending the sales tax to candy, Olympia estimates it will add 28 million USDs to the state coffer.

Washington is not the only state contemplating if not a dollar to donut revenue scheme - or at least a penny to calorie ratio. A recent poll showed New Yorkers overwhelmingly supporting the idea of a tax on fizzy (non diet) soda, the City of Chicago collects $18 million on a soda tax, Philadelphia is considering a similar act, Democratic lawmakers in Colorado are attempting to tax soda and Washington state is looking beyond the candy bar to soda and water to raise revenue. These actions have nothing to do with so-called ‘fat taxes’, like the one recently enacted in Romania in an attempt to address the rising consumption of fatty, salty and sugary foods. That is right Romania was the first EU country to enact a fat tax, take that Sweden.

Normally the thought of a value-added tax or listening to the justification for a sin tax causes me react  somehow like both Howard Zinn and Ayn Rand. It isn't quite that simple I think the best corollary to taxing soda is to take a look how that other fizzy beverage beer is taxed.

Beer is taxed in all states and the District of Columbia. The tax rate seems to have little to due with beer consumption – New Hampshire and Nevada really guzzle beer despite a hefty taxation, Wisconsin likes its beer but taxes it on the low end of the spectrum. And in a state that possesses the highest rate of abstainers, where the drinking of beer is not viewed kindly - I’m talking to you Utah - has Salt Lake levying about a nickel of revenue per pint, yet no one complains about truth, justice and the rights of consumers to make their own choices when beer is taxed.

The idea that consumers will make better food choices if fatty foods are taxed is absurd and punitive and does little to address the availability of healthy food. But the issue before many lawmakers right now is should soda be taxed like beer? I’d vote yes on that ballot measure. Should candy bars be taxed? I don’t have a good answer to that but the debate should be about the budgetary goals not how candy bars represent unhealthy calories. And especially not how confections are about equality, non-elitist enjoyment or the power of personal responsibility.

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