If the soda tax were out of sight, would it be out of mind?
Friday, September 15, 2017
by Eric Zorn
Are you aware of the nearly 11-cents-an-ounce potent beverage tax paid by customers in Chicago?
The tax dwarfs the new penny-an-ounce sweetened beverage tax that now has so many Cook County residents in an uproar, but I’m guessing you’re fairly oblivious to it.
You may not regularly purchase alcohol that’s 40 proof and up — think bourbon, whiskey, vodka, tequila, Everclear and so on. And even if you do, the state, county and city “sin” taxes that add up to $13.73 a gallon are hidden inside the shelf price.
The same is true of the combined nearly 36-cents-per-cigarette tax Chicago smokers pay at the register. Of course they’re aware that the combined $7.17-per-pack taxes more than double the price, but they don’t see what the various government bodies are nicking them for.
Ditto gasoline taxes. The Illinois Petroleum Marketers Association says invisible federal, state, county and city taxes and fees boost the per-gallon price of gas by about 50 cents, and the law forbids stations from advertising a pretax price.
“When customers actually see the tax, they tend to get angry,” said Carol Portman, president of the Taxpayers Federation of Illinois. She said she suspects part of the reason the public is so irate about the sweetened beverage tax that went into effect in August is that it’s a line item on grocery receipts and not simply tucked into the price.
County officials wanted it otherwise. The original ordinance said the tax “must be included in the selling price ... (as) advertised or posted,” and that retailers could state it separately on receipts if they chose.
But due to complexities in the tax code, the Illinois Department of Revenue ruled that adding sales taxes on top of the beverage tax would amount to double taxation. Retailers identified the additional problem that purchases by those in the Supplemental Nutrition Assistance Program (SNAP, informally called food stamps) are exempt from state and local taxes.
Both are issues that nimble point-of-sale software could address, but the SNAP problem suggests a bigger question:
If these sweetened beverages are as bad for you — as nutritionally empty and disease-enabling — as the current pro-tax advertising campaign has been insisting, then why does the government help low-income people buy them?
SNAP benefits don’t cover booze or cigarettes, after all. So by the same health-based logic used to justify the sweetened beverage tax, SNAP should exclude soda, energy drinks, bottled Frappuccinos and all the other drinks to which a penny an ounce has been added to the price.
Such a change would send a dramatic signal to parents of all income levels to stop encouraging their kids to swill pop and maybe cut back a little themselves.
And it would be consistent with one of Cook County Board President Toni Preckwinkle’s main arguments for the tax, which is that it will discourage consumption in impoverished communities that suffer disproportionately from ailments related to excessive sugar consumption.
Of course such a change would require a federal waiver that Big Soda would try mightily to block. Taxpayers subsidize sugar crops, then subsidize the purchase of sugary drinks, then subsidize the health care for those sickened by them, and that’s how they like it.
Far likelier is that the Cook County Board will vote next month to repeal the tax as public clamor is demanding.
Would it have been more popular if it had been hidden? We’ll probably never know.