In San Mateo County, California, the Board of Supervisors is holding a closed-door session to deal with a $20 million mistake. As mistakes go, it’s a pretty big one.
The San Mateo County Superior Court awarded Genentech, a self-described profitable biotech firm, $20 million in a recent court case. Genentech had filed suit against the county, claiming that the company had been overtaxed. The court didn’t agree - or disagree. The court didn’t even hear the case. The case wasn’t heard within the appropriate time frame - resulting in a default judgment in favor of Genentech.
How could this have happened? Officials aren’t giving out any specifics, stating merely that it was it was “probably a combination of a poor calendaring system and human error.” I’ll say. With this kind of money, I’m guessing that the human that contributed to that error is now out of a job…
As for the county, Supervior Mark Church notes that this couldn’t “have come at a worse time, with the state budget crisis and the cutbacks we’re experiencing.” This is especially a concern since property tax dollars are largely used in the county for school budgets. Church went on to say that he is hopeful that Genentech would not take advantage of a technicality.
I wouldn’t bet on it.
Especially after Genentech spokeswoman Caroline Pecquet has said, “Like any other taxpayer, we simply want to pay the amount of tax we believe is legally owed.”
And remember, they believe that they had already overpaid.
You do the math on that one.
I’ve posted before about sin taxes - this notion of using tax as a means of controlling or modifying behavior.
In the UK, the Chancellor delivered the new budget this week. The budget included little in the way of new or increased taxes since the UK is in the throes of many of the same financial woes that the US is experiencing. However, the few new taxes that were introduced are noteworthy: they are pure sin taxes.
The tax increases that are getting the most press currently are boosts in the prices of alcohol. The new budget calls for a 4p addition in tax for beer; 3p addition in tax for cider; 14p addition in tax for a liter of wine and a remarkable 55p for hard liquor. The rise in tax prices was contemplated as a deterrent against binge drinking. The question is whether that makes a difference in behavior.
I’m not a binge drinker so I will say that I don’t understand the mentality. That told, I can’t imagine that an increase of 3p per beer, which works out to approximate 5¢ per drink, would sufficiently serve as a deterrent to binge drinking. Would a nickel really cure an addiction?
So let’s call a spade a spade: the increases in tax on alcoholic drinks aren’t really meant to serve as a deterrent. They are a revenue raiser - and a revenue raiser that few taxpayers would challenge.
In fact, sin taxes rarely attract attention. That’s the beauty of sin taxes. The behavior that they are meant to contain or modify is generally of a nature that is morally or ethically frowned upon. Realistically, the Budget Office understands that there will not be a huge public outcry against increasing the tax on drink. They would expect a different response to an increase in, say, sales tax.
So maybe sin taxes do work - but not in the way that you expect.
