Thursday, May 27, 2010

Sales Tax on Soda Tax Passes

With little fanfare DC expanded their general sales tax to include soda.

The tax appears to apply to the same products that the original ill-conceived soda tax would - only those with sugar.

This is a far more reasonable tax. In fact I don't see why it wouldn't be expanded to include any kind of junk food.

The tax rate is the same as that on many other goods that are already taxed in DC. A $0.99 2-liter bottle of coke will get taxed at 6 cents, proportional to its cost, not 67 cents, proportional to it's volume.

I'm not sure why they would just tax sugared sodas, though. This makes implementation difficult. Practically speaking, any business that doesn't operate with a computerized scanner checkout system (e.g., anything other than big supermarkets) will probably just pay the tax on the bottom line for soda they buy from the distributor, and raise prices across the board. It's too complicated for a corner store to expect their employees to figure out at the point-of-sale which drinks must be taxed and which must not.

Likewise, I remain unconvinced that potentially cancer-causing artificial sweeteners are any better for you than sugar. But I have been called crazy before, so that's just me.

At the end of the day, the tax rate is totally reasonable, and hopefully this will put to rest the insanely high per-ounce tax, and the frightening precedents that would have brought.


Nichole said...

I believe that artificially sweetened (non alcoholic) beverages are also included now.

Jamie said...

Ah yes - you're right, I must have misread it. Well I think that's a good thing! All's well that ends well.

Mike Licht said...

While the new tax would raise revenue and be easier to administer, it will not be the disincentive to sugar consumption the original bill sought to create. Sugary drinks contribute to obesity, a major American health problem.

Jamie said...

I disagree that taxing soda is the right way to address that problem. If you're interested in why you can read my previous posts on the subject.

But at a purely local level, it seems pretty clear that the real problem is that we are actually directly responsible for feeding our kids crap - the quality and healthfulness of our food is poor. We have free soda in the cafeterias. I'm happy we are changing this.

Soda is just one of many things contribute to obesity such as McDonalds, lack of exercise, and general poor nutrition. But soda's no more inherently unhealthy than almost everything else people consume, and the rate at which we had planned to tax it was outrageous and without precendent. It's orders of magnitude greater than our tax on beer and liquor.

kob said...

This is such nonsense. The DC council loves the broccoli and anti-plastic bag crowd because they are providing cover for tax increases. This is like voting for Sarah Palin because you believe it will make you more patriotic.

kob said...

.. And how will it be before the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) becomes the Bureau of Alcohol, Tobacco, Firearms, Explosive and Sugar (ATFS)? This country is headed in wrong direction. Unsweetened Tea Party? Not on your life!