Illinois Democrats have proposed a penny-per-ounce “sodapop tax” – a tax on sugar-sweetened drinks.
Now, when you propose a number like “a penny,” it sounds small, and many people tend to dismiss it as inconsequential. But let's do the math.
A 20 oz bottle of cola, lemon-lime, or root beer, sold alone at a gas station, might be $1.69 or so. Another twenty cents added on to that might seem unimportant, on its own, though it’s a brand new 12% tax on the purchase (and remember, there are still other taxes, like the state and local sales tax, in addition).
A typical large 32 oz soda at a fast food place (which is often half ice) might run $1.75. The thirty-two cents the Democrats want to add to that drink constitute a brand new 18% tax. You might not notice it at first, but your budget will show the shrinkage a lot faster than it did when Illinois’ already-high sales taxes were the only government paws in your lunchbreak wallet.
At a restaurant, you typically pay $2.50 to be served a cola or lemonade, and at most restaurants, free refills are a given. Will the state make the restaurant charge for every drink? Or just the first? Or will they assume that most people have one refill, and average it out by charging for two 16 oz drinks? Those 32 cents in additional taxes will add up… particularly when a family of five goes out to dinner, and see an additional $0.80, or $1.60, or even $2.40 in taxes just because they all ordered a cola or root beer with their meal (and don’t forget, at a sit-down restaurant, this will push up the tip too, though not by much). In a $50 or $100 dinner check, this may look like just a percent or two, but still, it all adds up.
Do you buy soda in cans, by the case, for your family? Do the math here. A 12-pack is 144 ounces; that’s $1.44 in sodapop tax. A common 24-pack is 288 ounces; that’s $2.88 in the new sodapop tax alone.
The common brands of 24-packs, among the most common ways that people buy sodapop nowadays, tend to run between $5.50 and $7.99, depending on the grocery store, depending on whether it’s on sale that week. The sodapop tax doesn’t move.
When the product is a typical regular price, $2.88 on an $8.00 box is a whopping 35% tax. And when the product is on sale – every week, something is , either Pepsi or Coke or RC – then that penny-per-ounce adds up to an unbelievable 52% tax!
If you buy one 24-pack a week for your family, that alone is another $150.00 per year from your household budget. And that’s not even counting all the other purchases we’ve outlined, at restaurants and gas stations and fast food counters. It is no exaggeration to say that this could be a thousand-dollar annual tax on a typical family. How do you like those Democrats, huh?
The Ever-Shrinking Wallet
A proposed sodapop tax – one that will probably never see the light of day because it’s so outrageous – could be easily dismissed, if it were a single proposal by a single mathematics-challenged legislator who truly doesn’t comprehend the damage it would do.
But this is no exception. This is in fact the rule, as far as modern Democrat proposals are concerned. Consider:
Obamacare is raising health insurance premiums and deductibles on tens of millions of Americans. Just like a tax, Obamacare is causing the typical American to have less money at the end of the day. Whether it’s a thousand dollars less or several thousand dollars less, it hurts those individuals and families, because it displaces money from other things they would have done with the money. They might have gone out for dinner and entertainment more, saved more in savings and retirement accounts, bought more furniture or clothes, even bought a new car or house.
Or turn to the insane increases in CAFÉ standards over the recent past, while fighting domestic drilling of oil, and all this coupled with the Hours of Service (HOS) changes that the administration is forcing on our trucking sector. By having to pay more for fuel and transportation, our products have a higher cost on the store shelves, so we can afford to buy less of them. It’s a subtle reduction in our standard of living … sometimes barely noticeable, but it all adds up. These energy costs represent a few more percent of the price of some products, several more percent on others… energy has raised some products’ costs by a quarter or a third in recent years, because energy and transportation naturally have a different respective impact on the prices of different products.
As food goes up in price, we have less to spend on other things. But don’t worry, the price of those other things is going up too.
It’s a four-tiered hit to the American wallet. Higher taxes, higher regulations, higher prices of intermediate products and necessities, and the reduced job opportunities that result from all this.
We hear reports of job losses and wonder why, when the stock market is strong. Or we see people continuing to endure home foreclosures, because they have jobs, but their jobs pay less today after the toll that five years of Obama policies have taken on our economy.
This is all related. It’s a matter of the most basic foundation of economics: money spent by the private sector will multiply, while money taken by the public sector ceases to grow, and can even do damage.
The more we have as individuals and families – the more of our own money we are allowed to keep – the more it can benefit the rest of the economy. If we still have that thousand dollars that Springfield or Washington wants to take away from us in taxes, we can go to more restaurants, buy more birthday presents at the mall, take the family to the movies, put more money away for our kids’ college or our own retirement.
But if we let the government take it, then it’s that much less we can spend, in these ways or in a thousand other ways. Every year, the government shrinks our wallets so we have less money to spend, less freedom to choose how we live.
And consider the subsequent result of this errant policy: If your town has 5,000 families, all with thousands of dollars less per year because of the sugar tax, or the latest cigarette tax, or the latest hike in gasoline prices, or the latest jump in healthcare insurance because Obamacare mandated so many additional things on all our policies… then that’s millions and millions of dollars less that your community has to spend. What happens to the malls, the restaurants, the local churches and charities, when the people of a community have five or ten million dollars less to spend?
The malls suffer. The restaurants suffer. The churches suffer.
And when the mall stores have to cut their staff… when the restaurants fold from lack of clientele… when local manufacturers can’t keep their doors open… then we have a vicious spiral going downward, ever downward. More people unemployed means the state needs to put more people on welfare programs like housing assistance, unemployment insurance, food stamps. More on welfare means the government must collect more taxes to pay for it. More taxes means more businesses close, more people needing assistance. It can become endless.
There is a solution. We need to shut down every proposal for new taxes or for tax hikes. They are destructive, no matter what kind of taxes they are. The issue isn’t who’s paying it, or how much it is. The issue isn’t whether it’s a sin tax… or whether it’s optional or avoidable. The issue is simply this: Is it taking money out of a private citizen’s wallet, so he has less to spend on other things? If so, then it needs to stop.
Government taxes, government regulations, government squeezing of the shriveled turnip that is the American economy – this is the problem we face. We must fight every tax, not just the sodapop tax on sugar-sweetened drinks, but all of them. Because the ruling Democrats’ love of an endless stream of new taxation is crippling our economy, depressing our standard of living, diminishing our opportunities, crushing our dreams.
And there’s nothing “sweet” about that.
Copyright 2014 John F. Di Leo
John F. Di Leo is a Chicago-based Customs broker and international trade compliance trainer. He drinks diet soda, but unlike the fools who spent decades rolling over to cigarette taxes, entertainment taxes, and alcohol taxes, he has eyes open wide enough to be able to see that even if his wallet isn’t the target today, it will be tomorrow, so we must ever be vigilant. Tax hikes may not visibly hit you directly, but they hit EVERYONE indirectly.
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