Opinion on I-1107: repealing taxes on soft drinks

Initiative Measure No. 1107 concerns reversing certain 2010 amendments to state tax laws. The measure would end sales tax on candy; end temporary sales tax on some bottled water; end temporary excise taxes on carbonated beverages; and reduce tax rates for certain food processors.

I’m in favor of sin taxes if I agree that the items being taxed are sins. It’s simple economics: tax the things you don’t want to happen. When the price goes up, people do them less. It’s the principle behind cap-and-trade and carbon taxes. It’s the principle behind congestion tolls. It’s possible to raise such taxes too high. When a thriving black market in the item comes around, then you know the taxes are too high.

I’m all for taxing candy and soft drinks. There exist relatively cheap, relatively healthier alternatives that people can buy instead, if they want to avoid the tax. If you can’t go without your Coke Zero, pony up.

The soft drink industry has spent something like $16 million to pass this. The advertising campaign says it’s all about the taxes on grocery items that were included in the tax for technical reasons. a) the taxes on those items are around $4 million. The beverage industry could have donated the $16 million to grocery manufacturers 4 times over, and we wouldn’t have a need for the initiative (if even that’s a concern). b) The opponents of the tax could have crafted the initiative to repeal just the grocery tax part, but they did not. Their arguments hold little weight with me because of this.

I’m for keeping the tax and voting no on I-1107.

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