Monday, January 25, 2010

Ritter wants to go hard on soft drinks

Posted By on Mon, Jan 25, 2010 at 4:47 PM

Gov. Bill Ritter's plan to fill a small chunk of Colorado's $1 billion-plus budget gap by letting the state's 2.9 percent sales tax apply to candy and soda purchases has drawn some predictable outrage.

The Colorado Beverage Association (CBA) came out today as adamantly opposed to Governor Ritter’s new proposal to tax food. “This proposal falls flat. Our customers have never been forced to pay a state tax to buy our product so we believe imposing a new tax without a vote of the people in Colorado is clearly wrong,” said Chris Howes, Executive Director of the Colorado Beverage Association, a trade group representing soda manufacturers. “Levying more taxes on working families at this time is the wrong way to put the fizz back into our economy and get people back to work.”


Howes argues that the tax should be subject to a vote under Colorado's TABOR amendment, but right now it appears that lawmakers have the legal wiggle room to make the change without a vote because it would end an exemption rather than the create a new tax.

So the question is, should they? The candy and soda tax would raise about $18 million a year, and many would argue it could have the positive effect while raising cash and reducing consumption of products linked to obesity, tooth decay and other health problems.

Some, the Denver Post points out, would liken a tax on soda and candy to "social engineering." But is that such a bad thing? If a struggling family opts to buy orange juice instead of soda to avoid the tax, who does that hurt? (Besides, obviously, Chris Howes and the soda manufacturers.)

Here's the full CBA press release:

Colorado’s Unfair Soft Drink Tax

January 22, 2010 - The Colorado Beverage Association (CBA) came out today as adamantly opposed to Governor Ritter’s new proposal to tax food. “This proposal falls flat. Our customers have never been forced to pay a state tax to buy our product so we believe imposing a new tax without a vote of the people in Colorado is clearly wrong,” said Chris Howes, Executive Director of the Colorado Beverage Association, a trade group representing soda manufacturers. “Levying more taxes on working families at this time is the wrong way to put the fizz back into our economy and get people back to work.”

Traditionally, food purchased for home consumption in Colorado has never been subject to the state’s 2.9% sales tax. “Unfairly singling out soft drinks for taxation will raise prices, and higher prices will reduce beverage sales in Colorado directly impacting consumers and jobs in this state,” said Howes.

Lost beverage sales damage businesses throughout Colorado.
Colorado has tens of thousands of jobs linked to the beverage industry, its customers, and suppliers. Now is no time to be taking away good-paying jobs with benefits from Colorado workers.

Across the nation voters are rejecting beverage taxes as a way to fill state coffers. According to a Rasmussen poll, 70% of Americans oppose a national tax on all non-diet soft drinks, while only 18% of the public support the idea of an “obesity tax” similar to the one proposed in New York.

Maine voters in November 2008 overwhelming rejected (64%) a beverage tax to fund healthcare programs.
New York in 2009, Governor Paterson dropped his 18% soft drink sales tax proposal due to a citizens’ grassroots revolt.

To have a significant effect on the state’s financial void, the state should look at comprehensive solutions that will have a meaningful and lasting impact on Colorado citizens, not simplistic approaches targeting one or two items in our grocery cart for additional taxation.

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