Caffeination Taxation

[MavKikiNYC]

Outrageous.

Why not tax 'marital aids' instead? Maybe a surcharge on porn. A tariff on prophylactics and personal lubricants.

But caffeine?

Proposed Tax Rouses an Already Jumpy City
By SARAH KERSHAW


SEATTLE, Sept. 1 — In these lean times, cash-poor states and cities across the country have pondered and enacted a host of creative taxes and fees, raising the cost of snowmobiling in Montana, trout fishing in New Mexico and marrying in Massachusetts.

But now there is the proposed espresso tax in Seattle.

Seattle is the coffee capital of the nation, the birthplace of Starbucks, a caffeine-crazed city where espresso is available at gas stations, hospitals, roadside stands and drive-through windows. Seattle is so identified with the liquid produced by forcing steam through ground coffee beans that an espresso tax is like a tax on the city's very soul.

The formal name of the espresso tax, which would add 10 cents to the cost of every beverage served in Seattle containing a half-ounce or more of espresso — but would not apply to regular drip coffee — is Initiative 77. Sponsored by the Early Learning and Care Campaign, it will go before voters on Sept. 16.

If Initiative 77 passes, the annual espresso tax revenue, estimated by its sponsors at $6.5 million, would be used to pay for day care and pre-kindergarten programs for low-income children, services that have been sharply cut in recent years.

"I think the cause is good," said Doug Tolliver, 36, a Seattle native who was sipping regular drip coffee outside a Starbucks in the Wallingford neighborhood the other day.

The initiative, though, is "somewhere between creative and strange," he said.

Strange, perhaps, but supporters say taxing espresso, which was briefly considered last year in Portland, Ore., but has apparently never been tried elsewhere, is also ingenious. They say consumers who already pay at least $2.50 for a caffè latte or a mochaccino are not likely to mind paying an extra dime, particularly for a good cause.

"Seattleites love our coffee and we also love our children," said John R. Burbank, executive director of the Economic Opportunity Institute, a nonprofit organization that came up with the idea for the ballot initiative. "We believe that we should have a kid-friendly community in which we actually don't leave children behind. Unfortunately, with current funding, we are leaving a lot of children behind."

Mr. Burbank said the tax was a fairer way to raise money at a time when the economy was weak because it would affect people with higher incomes more than it would affect the poor.

"Lower-income people drink less espresso than upper-middle-class people," he said. "I've already had two tall double lattes, and I'll probably get another today."

He added: "If you don't want to pay it, you can buy drip coffee or tea. But I believe people are more likely to want to consume espresso if their morning purchase doesn't just go to giving them a buzz but goes to children."

In an era of skyrocketing "sin taxes" on cigarettes and alcohol, it is not clear where espresso fits in. Espresso may be widely accepted as a luxury, even by the many addicts here, but it is not considered a sin. And many coffee drinkers here who support cigarette and alcohol taxes take issue with one on espresso.

The opposition to Initiative 77 is well organized, well financed and witty, having formed a campaign called Joined in Opposition to the Latte Tax, or JOLT. It includes heavy hitters like Starbucks, which operates 80 of the estimated 650 businesses that would be subject to the tax, and smaller businesses like the wildly popular Victrola Coffee on Capitol Hill, a Seattle neighborhood crammed with a dizzying selection of coffee shops.

Businesses with annual gross receipts of less than $50,000 would be exempt.

"Taxing a single product, taxing that way is a slippery slope for other products to be taxed," said Audrey Lincoff, a spokeswoman for Starbucks, which has headquarters in Seattle. "We oppose it because we feel that it really is too important to fund these programs by being dependent on a single product."

Ms. Lincoff declined to say whether Starbucks would pass the tax onto its customers if it is approved. But smaller businesses said they would have to charge more for the espresso drinks, and many said the tax would create an accounting quagmire, requiring that charges for espresso drinks be separated from those for other products.

"I think it is a bad public policy," said Jen Strongin, a co-owner of Victrola Coffee, adding that she would probably raise the price of espresso drinks by 10 cents if the tax were approved. "I think it sets a precedent for future taxation in the city that would be a bad idea: taxing specialty items like espresso or salmon, something that someone deems a luxury item."

There are no exact figures on how much espresso is consumed in Seattle, which makes it difficult to calculate how much money an espresso tax would raise.

But Mr. Burbank's organization used gourmet coffee consumption statistics from the National Coffee Association — an average of .38 cups per capita daily on the West Coast — to reach its estimate of $6.5 million annually, based on Seattle's population of about 550,000 and about 50,000 commuters. City officials, however, said the tax would raise $1.8 million to $3.5 million annually.

The Early Learning and Care Campaign gathered 30,000 signatures, 11,000 more than required to put the initiative on the ballot. And Mr. Burbank said he was confident that in a city known for its sympathy toward social services, the measure would pass. Polls conducted by his organization last year showed wide support for such a measure, he said.

If the tax is approved, the revenue would aid places like the Small Faces Child Development Center, which like most publicly financed child care programs has had to reduce staff training and turn away children because of budget reductions.

More than 600 children are on a waiting list for a city day care subsidy. The tax would allow Small Faces to accept 5 to 10 more low-income children, said its executive director, Lynn B. Wirta.

"It's 10 cents for kids," she said. "The mayor and our governor cut the money for children's services and we were charged with being creative in a way to fund this, so here we are."

[Dooby]

If Initiative 77 passes, the annual espresso tax revenue, estimated by its sponsors at $6.5 million, would be used to pay for day care and pre-kindergarten programs for low-income children, services that have been sharply cut in recent years.

The greatest, most successful sham in the history of government is a tax whose revenue "will go to children".

Just like the money from the Texas lottery being used for education. And just like the USA doesn't support Israel's military.

Please, America. Don't fall for this idiocy. It is just a shell game.

[Smiles]

If only there was some sort of accountability.... it could be in incredible if those 600 children got quality daycare.

Is there a way to prevent such shams, Dooby? What would you suggest?

[Dooby]

There is no way to fix it. In theory, you could create some form of trust (not unlike Gore's lockbox for social security, which was also a sham). But then the government won't spend other revenue on the issue. You also run into the problem of a taxing authority collecting for non-government entities. It just doesn't work out.

The only thing to remember is that all government revenue, regardless of the source, is water being poured in a bucket. The bucket is not divisible, it cannot be partitioned. And you can never get the same water back.

BTW, all the money in your social security account has already been spent. Sorry to be the one to break it to you.