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News & ArtsFriday, January 8, 2010
Olympia Dept. of Corrections: Soda Tax
Posted by Dominic Holden on Fri, Jan 8, 2010 at 12:18 PM
Yesterday, I reported that lawmakers heading to Olympia were considering applying the sales tax to soda pop, which, they said, was currently exempt from sales tax as a food item. It turns out that the sales tax already applies to soda. Today State Senator Joe McDermott (D-34) says he was “wrong” and State Senator Jeanne Kohl-Wells (D-36) says she “misled” me. (I didn't check the Washington Administrative Code when I wrote the post because I thought the two lawmakers, who have served 26 years in the legislature between them, knew the specifics of the proposal.)
But both say there is still discussion of adding a tax to soda—just not by applying standard sales tax. McDermott and Kohl-Welles today say that lawmakers are discussing taxing the bulk wholesale syrup used for fountain drinks. Currently the syrup is taxed, but businesses receive a business and occupation tax credit for it. “If we repeal the B&O tax credit for syrup tax paid, we would get about $8 million a year,” says state senate spokeswoman Anne Burkland. She notes that would increase to $15 million a year if the state raised the syrup tax from $1 to $2—which is still a drop in the bucket toward filling the state’s $2.6 billion budget hole.
However, Kohl-Welles says lawmakers “can increase the sales tax, too.” If the state set the tax sales tax at five cents per 12 ounce unit, the state would generate about $100 million a year, according to Burkland.
That’s a step in the right direction, but we should take it further—tax a quarter on a 12 ounce can. By Burkland's math, that would be a half billion dollars to help offset the medical costs of obesity and diabetes that soda contributes to, and actually makes a dent in the state’s budget.
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If we need the money, just do a flippin' income tax and be done with it. It can be very easy to administer:
-- What was your AGI for the, based on the federal form you already fill out?
-- Subtract x-dollars
-- Multiply it by y-percent
-- That's your state income tax
Why don't we do that? Oh, yeah, cuz even in librul ole Worshington, people with money benefit from our regressive tax system.
4
A measured, rational discussion about shifting our tax policy to a balance of sales and progressive income tax needs to happen. If we had a system like that we would still have a budget crisis but perhaps it wouldn't be as severe.
Here is another thought. TAX BOEING! They slap our state in the face all the time. Let's slap back.
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I guess I'd be okay with that as long as it also hits any prepared canned green tea drinkers in the wallet as well.
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One hundred million.
Bwaa haa haa
(looks aside)
was that enough?
12
Progressivism used to be a movement by and for the lower classes. Now that progressivism has become a movement that, while ostensibly for the lower classes, is in fact by upper-middle-class liberal arts majors, we get proposals like this.
"Oh," says the latte-sipping liberal, "soda is so unhealthy. It probably has a big carbon footprint, too. We should tax it and use it to fund services for the poor, like smaller comparitive literature classes at universities. And while we are at it, we should tax those nasty NASCAR races and use the money to subsizie Yoga studios."
15
Read Adam Smith's second book on Capitalism if you're slow or stupid enough to have believed any of the carp that Ayn Rand published.
@1,
No, they're not exempt. It seems like bottled water and carbonated water are though. At least the seltzer water I bought last week seemed to be tax free.
And yes, it is Econ 101. But as Will @15 comment shows, there are still plenty of people who view it as some evil right-wing conspiracy. The U.S. government did not start using dynamic scoring to evaluate proposed legislation until just a few years ago, and even then it was instituted over howls of protest from Democrats, who didn't like a change that made taxes look less revenue-generating and tax-cuts look less revenue-loosing, than the previous naive analysis that assumed people don't respond to incentives.
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@12 That would be me. No hat tip, Dominic? Aw.
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