Dancing with the Stars began this week and the show should have reserved a spot for the nimble San Francisco Mayor, Gavin Newsom. His proposal to charge a fee on city retailers who carry soda neatly dances around the legal requirement that all local taxes receive a vote of the people.
Voter approval would be required if a tax was affixed to each individual can or bottle of soda. However, Newsom wants to avoid the voters having a say by slapping a fee on retailers who carry soda.
His ploy may not stand up against legal challenges, which the mayor, himself, acknowledges will come.
No word on how Newsom wants San Francisco to use the money. In the past when discussing a possible tax on soda, he has suggested funding an exercise and media campaign to warn about health problems that he says are associated with soda drinking.
Newsom’s latest volley against soda followed the release of a UCLA study that links soda drinking to obesity in California. The American Beverage Association responded to the study by arguing that if obesity is the target, there needs to be education about all calorie intake, not just from soda, and the ability to burn off calories through physical activity.
Other foods that add calories could be the target of future fees, Jim Lazarus, VP of the San Francisco Chamber of Commerce told the San Francisco Chronicle. The Chamber opposes the fee proposal.
The Newsom fee proposal is another example of trying to hide government revenue increases from consumers. By charging a fee to retailers instead of adding a tax, the increased cost will be added to the price of the product. The charge will be hidden from the consumer. A tax tagged onto the product would be more visible.
This method of taking more from the taxpayer’s pocket seems to be catching on. The Business Net Receipts Tax that is part of the plan by the state tax commission works in a similar way. Taxes are added during each stage of the production process and rolled into the price of the goods that are purchased by the consumer. The consumer will have little knowledge of what share of the cost of the product is actually taxes.
Look for more of this type of dancing in government circles to hide taxes from consumers if the Business Net Receipts Tax and SF soda fee pass muster. Call the dance the government limbo: How low can you go?
Joel Fox is the Editor of Fox & Hounds Daily. For more, visit the Fox & Hounds Daily Web site.
–