Monday, May 17, 2010

At Least We've Got The "Taxation" Part Down

The District of Columbia is the only place in the United States where U.S. citizens are expected to pay Federal taxes, yet have no congressional representation. That this is bad, is something that I think every D.C. resident can agree upon.

Life is nothing if not filled with ironies. D.C. is also one of the most heavily-taxed places to live in the United States. In 2008, DC ranked 8th among all U.S. "states" in overall local tax burden, according to the Tax Foundation.

Not satistfied with that rank, though, DC is pondering the list of things that currently are not taxed. The first one is a tax on soda, with the idea being that we can make money at the same time as discouraging unhealthy beverage drinking habits.

Ironically, this is at the same time as a tax on yoga and health club memberships is being considered.

The soda tax being proposed is 1 cent per ounce of soda.

Let me put that in perspective.

Two-liter bottle of soda: 65 cents.
Six pack of coke: 72 cents.
Case of coke: $2.88

How much does a two-liter bottle of soda usually cost? Maybe $1.69 if it's a brand-name. $0.99 if it's Rock Creek or whatever. This will nearly double the cost of a bottle of cheap soda.

A case of cheap soda, or even name-brand soda on sale or at a place like Costco, is usually around $6 or $7. This will add 50 percent to that cost in DC.

Our tax on beer is 9 cents per gallon, or .07 cents per ounce. 7/100 of one cent per ounce! We're going to tax soda at more than ten times the rate of BEER?

Each new tax we add, especially those that directly affect your grocery bill, increases the chance that people will say "enough is enough" and, at the margin, choose to shop outside DC. In the long run, these insults affect people's decisions about where to live. And in DC, you have two other easy choices.

What is healthy living?

Anyone who hasn't lived under a rock knows that just about every single food product on Earth has been both praised and vilified over the years. Carbohydrates? Bad. Let's tax flour. Fish? Lots of mercury, bad. Fat? Bad. Let's tax butter. Oil? Bad. Salt? Bad. Potatoes? Bad.

Food choices are a lifestyle decision. You know what other things affect your overall health?

How much you exercise. Where you live. What kind of job you have. What your recreational activities are. Who your parents are.

Everything IS BAD. There is nothing that won't kill you. But the impact that anything has on you is not directly related to that product -- it's related to your lifestyle. When I was running marathons, I ate unbelievable amounts of sugar, carbohytrates, and greasy food. And my cholesterol and body fat counts were enviable. Probably not so much any more... but I blame my broken foot for that. Of course, that injury is also related to running, so obviously we should tax exercise! Oh yeah... we're thinking about that, with the yoga and health club taxes.

You can't make everyone pay back society in the exact propotions to the risks of their activities. Besides which, your genetics may have a lot more to do with your overall risk than anything else.

We are on a dangerous path towards taxing things that the current fad says is bad for you. Are we really ready to put a tax on flour? Because this doctor says that "full elimination of grains" is the only way to ensure heart health.

Obviously, it's time to start taxing dirt, because everything that grows from it will kill you.


Mr. J said...

We need to tax air and water too because things that grow from the soon-to-be-taxed dirt use it. Double whammy!

Anonymous said...

i really enjoy your posts. i dont always agree, but they get me thinking..