Is it the Carbonation? Is that Why You Hate Us?

By April 30, 2008Taxation

Maine is the latest state to embark on a broad expansion of government paid by taxes targeted on a very narrow industry and retail segment, based on a bogus “but it just seems right” nexus: Soda pop = bad health. From the Tax Foundation:

Back when cigarette tax increases were justified by politicians on the grounds of paternalism (even though they really just wanted more money), critics argued that the same argument could be applied to other unhealthy activities and products like candy bars or soft drinks. But such criticisms were dismissed as being scare tactics and unrealistic. But now the nannies at groups like the totalitarian Center for the Science in the Public Interest are having their voices heard in the push towards even more state control over our lives (largely through tax policy), much like the American Cancer Society has done over the past two decades on cigarette taxes. Of course, all of this is in the name of public health. (You as an adult aren’t smart enough to make up your own mind about what to drink.)

Policymakers in Maine are the latest to succumb to this pressure of raising money by targeting specific products. This time it goes beyond the usual suspects of cigarettes and alcohol. If you drink soda, you’re now going to pay as much as 22 cents more for a 2-liter bottle. Yes, 22 cents more on that 2-liter bottle of Coca-Cola, Pepsi, Dr. Pepper, or even generic Sam’s Choice Cola (assuming Wal-Marts are allowed in Maine). This extra revenue is designed to help pay for health care for self-employed individuals and small business owners. Such a policy has basically no justification in sound public finance. Such a policy is likely even regressive given that the tax will disproportionately be borne by low-income Maine residents in order to finance a spending program that disproportionately benefits upper-income residents (those who own businesses and are self-employed).

And extra thanks to the Tax Foundation’s Gerald Prante who makes the connection between more, arbitary taxation and the loss of individual freedom. Someone needs to make that connection. Maine’s legislators sure aren’t.

(Hat tip: Jim Morrell.)

Join the discussion One Comment

  • Lisa Reisman says:

    Great piece. But how sad. I invite anyone to come to Chicago where our great mayor passed a tax on bottled water. And that had nothing to do with health! We were also the recipients of a new Cook County sales tax hike to 10%. (We win, we have the highest sales tax in the country). And then our city will wonder why retailers scale back in the city (because we are shopping outside county boundaries, particularly for any big ticket items). This is what I call government desperation. Heaven forbid our city/county government makes a service cut or saves money through better strategic sourcing.

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