Not National News: Costco Pushes Back Against Seattle’s Sugary Drink Tax
14th January 2018
he City of Seattle probably didn’t expect pushback from Costco, seen by many on the left as retail’s “anti-Walmart,” after its “sugary drink” tax of 1.75 cents per ounce went into effect January 1. But that is exactly what has happened.
In moves the national press, which largely supports such taxes, has thus far ignored, Costco is itemizing the built-in cost of the tax on its Seattle store’s shelf tags, and informing customers that they won’t pay the tax if they shop at one of two other Costco stores outside Seattle’s city limits.
The use of taxation for ‘social engineering’ purposes, rather than for purely raising government revenue, is one of the characteristics of the Progressive era. It is an indulgence in economic ignorance beloved by activist politicians who are sure and certain that they know better how the common people ought to act than the people themselves do.
Of course, they are wrong. And unfortunately, it divides consumers into two classes: those who can afford to shop outside of the jurisdiction imposing the tax, and those who can’t. Hence it is ‘regressive’ in the purest sense, targeting the poor and being merely inconvenient for the not-poor.
It also is the root of ‘black markets’, because criminals are very adept at arbitraging these situations of government-imposed market distortion. I predict that the second effect of this tax (the first being non-poor people doing their shopping outside of the Seattle jurisdiction) will be lawbreakers smuggling untaxed ‘sugar drinks’ into the very areas from which politicians are trying to exclude them, thereby (a) canceling the effect of the tax, (b) avoiding any increase in tax revenue (because people aren’t paying the tax), and (c) encouraging a scofflaw attitude toward government. The whole history of tobacco taxes is rife with examples of this behavior, which politicians make a habit of ignoring, and the ‘war on drugs’ shows what happens at the extremes of such behavior.
This can only end badly for Seattle.