Lawrence J. McQuillan writes:
Former New York City Mayor Michael Bloomberg is helping to bankroll a television-commercial campaign in favor of proposed soda taxes in Oakland and San Francisco, known as Measure HH and Proposition V, respectively, both of which will appear on the November ballot. You can’t miss the commercial if you live in the Bay Area, as it seems to air a thousand times a day on local TV stations...
The Oakland and San Francisco soda taxes would charge distributors an additional one cent per ounce of soda they sell (or $2.88 per case). The tax would also apply to other sugar-sweetened drinks.
As McQuillan notes, this could very easily end up as a tax on consumers despite the tax being applied at the distributor level:
There’s an important difference between the “imposition of a tax,” on the one hand, and the “incidence of a tax,” on the other hand. Imposition is where the tax is technically levied. Incidence refers to who really pays the tax (the tax burden), which is one of the most important questions regarding any tax. Every microeconomics principles textbook covers this topic.It really depends on the cost structures of the firms involved and the elasticity of demand for the product at the consumer level. Bloomberg knows this since the Bloomberg ad makes the implication, which is likely accurate, that the tax will impact consumers directly since it supposedly is going to fight childhood obesity and type two diabetes by raising the cost of soda at the consumer level.
In other words, as McQuillan correctly concludes:
The soda tax is also akin to telling your child this: “Your classmate Lawrence is not drinking what we think he should. So it’s ok to steal money from Lawrence and all his classmates until Lawrence stops drinking bad things.” Hopefully no parent would tell their child this. Neither should this immoral and flawed logic be the basis of public policy. But it’s the logic behind Measure HH and Prop V. The lesson being taught by the pro-tax side is “It’s ok to steal, as long as you think you’re doing right by it.” Taxation is always theft; “legal” theft, but theft nevertheless. It’s taking money by force from others.
Didn’t anyone tell soda-tax advocates it’s not nice to steal and lie?