Thursday, February 11, 2010

Sweet Taxes


By: Justin Tafoya

Gov. Bill Ritter is proposing a bill that will eliminate the sales-tax exemption for candy and soft drinks in Colorado. House Bill 1191 is estimated to raise $17.9 million and is one of seven bills before the Senate that will generate a total of $131.8 million that will help make up for the $1 billion dollar deficit that Colorado is facing in 2010-11. Gov. Ritter is hoping to “retire” the tax exemptions by March so the money can be applied to this years budget, which ends in June. The proposed bill will place a three cent tax on all soft drinks and candy, but it’s the definition of candy that has law makers skeptical. The bill states that candy that contains flour would not be subject to the tax, “So a dipped pretzel or a dipped Oreo is not candy, but a dipped strawberry is?" Those against the bill, local candy owners and beverage distributors, argue that the proposed Bill will hurt business and eliminate Colorado jobs. Those in support of the Bill certainly have Colorado’s health in mind, but the revenue the Bill would raise is the bigger issue. Taxing candy or soda pop is nothing new. More than half of the states in the country have adopted some form of taxing candy and soda. Despite the complaints of beverage distributors, Coca Cola has seen sales increase in those states taxing soft drinks. Although this will help reduce the deficit, the health effects, in my opinion, will not change. Perhaps we are on the verge of changing the way Coloradoans eat and drink but if Health is the issue that law makers seek, taxing Charlie’s Wonka Bar is not enough.



Works Cited:
http://www.denverpost.com/ci_13791335#ixzz0f6938BVB

http://coloradostatesman.com/content/991589-tax-exemptions-heart-controversy

http://blogs.westword.com/latestword/2010/01/candy_tax_proposal_if_they_rea.php

12 comments:

  1. BY JUDITH TAYLOR

    Interesting way to try to raise income fairly painlessly for the populous. I agree that the tax will probably make money for the state budget and not really change anyone’s eating habits. The definition of candy as not containing flour is an interesting one. Oreos and chocolate dipped pretzels really are not candy. Snacks, junk food, wasted calories they are – but candy they are not. Perhaps for the bill to both raise revenue and increase healthy eating habits, a better definition would be the % of sugar within the given item or serving. Of course, the sugar beet growers (once a major source of agricultural income within the state) would be very upset, as would the dentists… The state is in such a bad economic situation at the moment (how are the cuts here at CU affecting you and the classes you need to take), that whatever can be done to painlessly raise revenue, with little or no political (read electoral victory) pain from the legislators, should be done.

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  2. I believe this bill is a smart way to raise money while Colorado is facing such as deficit as it is now. I find it hard to believe that a three cent tax on candy and soda will cost candy producers much money or jobs. As for the health aspect I think it could be a starting block for making residnets more conscious of what they are eating.

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  3. Because Colorado is one of the, if not THE, healthiest states I don't see how taxing candy and soda will be that big of a deal for us. I do however think the guidelines of what "candy" is should be changed to include those things with flour. I believe this will raise much needed money, as little as it may be.

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  4. Because Colorado's budget deficit is in such a bad state, a 3 cent tax on soft-drinks and candy, which will produce $17.9 million to help reduce our overwhelming deficit, seems to me to be a pretty reasonable and economically sound policy. However, it would be interesting to know if policy analysts have weighed the benefits of the "candy tax" with any potential costs for the section of the economy reliant on candy based products, using "policy forecasts" - a term in Ch. 11. I wonder what the candy/soda industry arguing against the bill has estimated as the cost to their profits due to the proposed candy tax.

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  5. Candy is sanskrit for piece of sugar, therefore candy is a confectionary treat formed from sugar as its base. Calling an oreo candy is like calling the WNBA a sport, close but not quite. A strawberry comes from the earth and is not candy. A fruit or nut is not candy it can become "candied" however. And an oreo is a cookie not candy it is flour based not sugar based. As far as health is concerned most people are going to eat crap regardless of price. Also there are plenty of chunksters in Colorado Montana, Massachusetts, and Hawaii are all healthier by whatever standard they use to measure health.

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  6. I feel I should play the devils advocate and say this tax will achieve more harm then good. Taxes on items such as this hurt the poor most, and this will also hurt struggling businesses. As far as the government backing up the tax by saying it will help make consumers healthier I believe isn't up to them to decide. You can promote healthy habits in different ways but taxing items and forcing people to not choose certain items is not the way to do it. There is more to a healthy lifestyle then sugar intake.

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  7. with an increase in price on junk food, maybe people will seek a healthier option becuase it is more equally priced with junk food. also, this is a gret way of raising money on ttems that are options not necesities, like cigerettes and alcohol

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  8. As for the money being raised for the deficit, i am all for the tax because our economy needs the extra money, but i dont think that this will help eating habits of Coloradans. i agree that candy and soda is a contributor to obesity in the US, but i feel that fast/junk food, because of its taste and cheap price, is more the main culprit for obesity than a lolli pop or tootsie roll. A candy bar and burger cost the about the same. It seems to me the unhealthy people of America eat more fast food such as mcdonalds or burgerking more than candy. If a tax were to somehow to be put on fast/junk food, more revenue would be gained because people consume these more. Also if the other goal is trying to deter people from eating fatty foods, then taxing fast/junk food could help alot.

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  9. In my experience, Colorado is a considerably healthy state already. If people are going to consume candy and soda, they are going to do so despite a few cent increase in price. I think it is a little absurd that a chocolate dipped strawberry will be taxed but a dipped oreo will not be. This bill seems to need a lot of refining in its classification of what exactly candy is. Overall, I think Colorado could come up with better ways to raise revenue.

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  10. Given that over half of the states have already adopted such taxes, and there seem to be positive effects for soda distributors such as Coca-Cola, this seems like a very efficient and easy way to raise revenue. The 'debate' on what is defined as candy should not be enough to stop this tax from being enacted.

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  11. I agree with Woody's point, that candy is probably a minuscule problem compared to some of the other things people are eating. Soda I can understand. It seems like a very underhanded way of raising revenue, using easy scapegoats like candy and soda. It know its a stretch but it creepily reminds me of an excise tax. A stretch but people have cast ballots on a lot less than that.

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  12. I don't see this as an attempt to raise health awareness or damage the candy business, but rather just a form of taxation that is probably largely overdue. CO is in a state of debt, and if this can be helped by a 3 cent tax on soda and candy, then I am all for it.

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