Taxing Bottled Water: Saving the Environment or Killing Business?
I’ve blogged before about how the government uses tax as a method of altering taxpayers’ behavior. Different governments tax cigarettes, sweets and fatty foods and other “unhealthy” or “sinful” behaviors (remember PETA’s efforts to tax meat?).
But what happens when the behavior being taxed isn’t so blatantly bad for you as cigarettes or alcohol? What if what the government is doing may be deemed bad for business?
That’s when you sue, of course. Beverage and retail associations have filed a lawsuit asking the court to declare Chicago’s new tax on bottled water unconstitutional. The lawsuit alleges the tax unlawfully targets one product, violating a uniformity clause in the state constitution. Four plaintiffs have filed the suit including the Illinois Retail Merchants Association, the Illinois Food Retailers Association, the International Bottled Water Association (who knew such a thing existed?) and the American Beverage Association.
Another policy argument raised in the suit is that the increase will drive shoppers out of the city and into the suburbs. Excuse me while I spit out my mouthful of tap water. What? Really? Have these plaintiffs seen the cost of gas? Are people in Chicago proper drinking so much bottled water that they will save money by driving to the suburbs to buy it? I think that particular policy argument needs a little work.
Those in favor of the tax claim that it will encourage people to drink tap water, which means less plastic in city landfills. The city also has estimated the tax will raise more than $10 million.
What do you think? Fair? A good policy? Or unfairly targeting an industry? Where do you draw the line?
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2 opinions for Taxing Bottled Water: Saving the Environment or Killing Business?
J
Jan 7, 2008 at 3:01 pm
I tasted Chicago tap water a few months ago and it’s freaking disgusting. I think I would pay the tax to avoid having that taste in my mouth.
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Mar 13, 2008 at 7:30 am
[…] posted before about sin taxes - this notion of using tax as a means of controlling or modifying […]
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