Patterico's Pontifications

11/15/2009

Taxing Sweets to Balance Sour Local Budgets

Filed under: Government — DRJ @ 12:57 pm



[Guest post by DRJ]

More and more states like Colorado are considering whether to tax sweets and sodas to balance precarious state budgets:

“[Colorado Governor Bill] Ritter’s office estimates that eliminating the sales-tax exemption for candy and soft drinks would generate $17.9 million and help avoid deeper cuts to schools and colleges.

“We thought that people would be willing to pay 3 cents on a dollar candy bar,” said Ritter, who once spent three years running a nutrition center in Zambia before resuming his law career. “We just viewed it (allowing the sales tax) as something that doesn’t do anything to our (state’s) competitiveness.”

Illinois recently subjected candy and soft drinks to sales tax, San Francisco is considering a soda tax, and candy and soda tax proposals have been floated this year in Massachusetts and Pennsylvania. Even President Barack Obama said recently he was interested in the idea of taxing soda, saying kids were drinking too much of it.”

Supporters say taxes will help balance local budgets and make people healthier. Critics say taxes like this impact poor and middle-class Americans the hardest. Either way, states face difficult decisions as budget deficits are expected to increase in FY 2010:

“In total, states faced a budget shortfall of $113.2 billion in FY 2009. As high as that shortfall is, it is far less than some projections for the shortfall for FY 2010. According to one projection, states could, in total, face a shortfall of $142.6 billion in FY 2010.

It is worth noting that these shortfalls would be even higher if it were not for reception of federal funds. The reception of federal funds through the American Recovery and Reinvestment Act (ARRA) was used by states to fund some of their expenditures, lowering the reported spending that comes out of the general state fund.”

FY 2009 budget deficits for each state are listed here; projected state FY 2010 deficits are here; and stimulus funds distributed by state are shown here. Some states have no projected shortfall — good news for them — but bad news for the remaining states that make up the increasing difference.

— DRJ

8 Responses to “Taxing Sweets to Balance Sour Local Budgets”

  1. In light of the alleged “obesity crisis” facing us, perhaps it would be helpful to institute a “caloric tax” on all “prepared” foods on the grocers’ shelves?
    Though, when the AGW fraud manifests itself in another Little Ice-Age, all of those extra pounds people are packing around might be comforting – at least through the first few years of Winter.

    AD - RtR/OS! (603f4e)

  2. Ohio does not apply sales tax to food and does not consider candy and carbonated beverages food.

    John Hitchcock (3fd153)

  3. Each state is different.
    Hillary actually recommended (and WJC pushed through) a sales tax on groceries when First Lady of AR as part of a task-force that she headed to come up with a way to improve the State’s Ed system, and the grocery tax was the means to pay for it.

    AD - RtR/OS! (603f4e)

  4. They’re just following the lead of the corrupt idiots here in Chicago, where bottled water is already taxed, and soda and snacks are next in line. They’ve also recently hiked the liquor taxes to stratospheric levels.

    Dmac (a964d5)

  5. In addition to sweets, (to be doubly taxed as part of the way to pay for ObamaCare) this lunatic in Colorado wants to charge sales tax on Internet Sales.

    A clear violation of the commerce clause of the constitution which says that interstate sales are only to be regulated by the feds.

    When will these people learn that government produces nothing, EVER. all it does is consume resources and act as a drag on prosperity.

    MaaddMaaxx (b91eb0)

  6. Ohio income tax Form IT-40:

    Did you buy anything online from another state?
    How much did you spend?
    Enter the sales tax here and gimme.

    John Hitchcock (3fd153)

  7. Well, they can charge all they want, it is the collection part that is problematic.
    CA also taxes internet/mail-order sales by requesting that taxpayers list such items on their tax return and pay the appropriate “use tax”.
    They can only get the seller to collect the tax if the seller has a physical presence in the state (one of those pesky scotus things); but, they really want the sellers everywhere to collect these taxes and forward it to the appropriate state so that it can be added to the other good money that is being flushed down the toilet (I wonder if that’s a “low flow” toilet they’re using?).

    AD - RtR/OS! (603f4e)

  8. THey should cut state workers and pensioner salaries and benefits instead to cover the shortfall.

    cubanbob (409ac2)


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