Soda Tax Proposals Bubbling Up In California

california tax While making the federal income tax a ‘broad based’ tax for the first time, Today is October 21, the date in 1942 when the Revenue Act of 1942 was passed.

Proportions of -born African Americans, Puerto Ricans, and Mexican Americans who reported consuming more than one soda per day was more than twice that of whites.

The paper found that individuals with low incomes were nearly twice as going to purchase and consume soda as were those whose incomes were significantly higher. Besides, journal of Urban Health found an association between soda consumption and race, age, and income. I’m sure it sounds familiar. There was also a relationship between educational attainment and soda consumption. As That’s a fact, it’s labeled a fee on vendors, both initiatives permit individuals to purchase ‘sugarsweetened’ beverages outside the city and bring them in for personal and family consumption without paying the soda tax not a tax on consumers.

california tax

california tax This attempt at labeling subterfuge will likely result in significant crossborder shopping of taxed items.

The text of the Richmond’s legislation imposes a business licensing fee of 1 cent per ounce on any business that sells or trades a sugar sweetened beverage.

The vague language of the proposed tax increases has the potential to cause significant definitional problems as manufacturers, vendors, and consumers are forced to comply with the legislation. Many products that noone would consider to be soda nevertheless may fall within the scope of the proposed taxes. Basically, the statutory language will not specify what extent of sugar constitutes ‘sugar sweetened’, perhaps meaning that any drink with even a granule of added sugar should be subject to the tax. On November 6, voters in two California cities will consider imposing new excise taxes on soft drinks at the rate of 1 cent per ounce.

In El Monte, California, voters will consider Measure H, that imposes a sugary sweetened beverage license fee, and Measure C, that spends the proceeds. In Richmond, California, voters will consider Measure N, that imposes a business license fee on soda providers, and Measure O, that spends the proceeds. The story goes that obese people use more health care services than slimmer individuals, and these health care costs are shared through the socialized insurance pools of Medicare, Medicaid, and third party insurance providers. Some proponents of soda taxes claim that obese Americans create externalities, or shared costs, in the health care market. As a result, this would directly address obesity as the source of shared health costs as opposed to clumsily taxing soda, that is just amongst many caloric inputs. The shared cost problem they describe only exists because of the socialized and regulated nature of the nation’s health care system and could have been more easily remedied through reforms in Medicare, Medicaid, and ‘thirdparty’ insurance pools. For instance, proponents of this line of logic are quick to jump to increasingly economically distortive public policy measures like taxation. Chouinard et al.

Journal of Epidemiology Community Health provided broader insight into food substitution effects, with that said, this time considering a sales tax on saturated fat in the United Kingdom. The study found a strong tendency towards substitution and concluded that taxing the principal sources of saturated fat my be unlikely to reduce cardiovascular disease rates as long as the reduction in fat consumption my be offset by a rise in salt intake. Individual diet choices are determined by any person on the basis of nuanced information and individualized beliefs about what’s appropriate for their bodies. In any case, the tax is touted as essential to would lead to a decrease in BMI of just 003 points.

Fletcher et. See Scott Drenkard, Councilmembers in Baldwin Park, California Put Kibosh on Soda Tax Proposal, Tax Foundation Tax Policy Blog. Economic evidence shows that they have minimal effects since consumers is going to substitute other ‘calorie laden’ products for soda, while public health advocates claim that soda taxes are an useful tool to combat obesity. Therefore in case passed, Though thirty three states currently treat soda differently than groceries for tax purposes and four states currently have mild excise taxes on soda, the proposals in Richmond and El Monte will be the largest taxes on soda in any American city. Besides, in 2011, fourteen states considered similar legislation calling for increased excise taxes on soft drinks. Those rates will increase to 9 percent and 5 percent, respectively, if Proposition 30 passes.

While El Monte taxes sales at 25 percent, The City of Richmond has a combined state and local sales tax of 75 percent.

California’s ‘multi tiered’ income tax system has a top rate of 10 dot 3 percent and a separate statewide initiative will consider Proposition 30, that raises that top tax rate to 13 dot 3 percent.

California citizens are already subjected to most of the highest tax rates in the nation. Both cities considering soda taxes have high proportions of ‘lowincome’ households. Nearly all sin taxes disproportionately harm ‘lowincome’ individuals, as they spend a larger portion of their income on consumer goods. It’s a well in their 2010 study The Effect of Soft Drink Taxes on Child and Adolescent Consumption, Fletcher et al.a couple of academic studies conclude that their affect is either minimal or nonexistent, while soda taxes are touted by supporters as an obesity deterrent and revenue raiser. It does not follow that excise taxation is better method for addressing complex health problems.

There is also evidence that taxes on soda lead people to drink more beer. Cornell University showed that for households prone to buying alcohol, there was a 172 dot 4 ounce increase in beer consumption per month when a 10 percent tax was applied to soda, that equated to a heightened intake of 1930 calories in similar time frame. Governments Consider New Taxes on Soda and Candy, Tax Foundation Special Report No. While Overreaching on Obesity, See Scott Drenkard. For more on ‘crossborder’ tax avoidance, see Mehmet Serkan Tosun Mark Skidmore, ‘CrossBorder’ Shopping and the Sales Tax. Of course while BorderCrossing Sales, Tax Avoidance, and State Tax Policies, Reexamination of Food Purchases in West Virginia, See also Randolph Beard, Paula Gant, Richard Saba. So, see David Block Scott Drenkard, Governor Brown’s Tax Proposal and the Folly of California’s Income Tax, Tax Foundation Fiscal Fact No.

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