The loopy latte tax is a half-baked tax
Thursday, September 12, 2002, 12:00 a.m. Pacific
The espresso tax is a half-baked idea. But 30,000 citizens of Seattle put their names to it, and qualified it for the ballot. The Seattle City Council should let it go forward to November, with a clear recommendation to vote it down.
The proposal is to put a 10-cent tax on espresso drinks and put the money into child care. The idea is that child care is a necessity and espresso drinks a luxury, so that the one shall be taxed to subsidize the other.
There are several problems with this. The first is that espresso drinks have nothing to do with child care. They are luxuries, but so are DVD players, hardback books, sailboats, symphony tickets, baseball mitts, lawn fertilizer and after-dinner mints. Why pick on espresso?
The second problem is the mechanics of the tax. It would not be a sales tax to be added to the 9.3 percent already levied on prepared food and drink, nor a tax on gross revenues.
This is a tax per cup, with the $3.75 double-tall latte and the $1.25 single-shot espresso charged the same 10 cents but with a drip-coffee drink charged nothing. The vendor couldn't keep track of the tax by counting cups unless he had two sets of books, one for taxed drinks and one for untaxed drinks.
All this could be done, but for only $3 million a year, the ratio of hassle to revenue is not reasonable. The activists behind this clearly spent lots of thought on how to make it look good and hardly any on how to make it work.
That leads to the third problem, which is that all initiatives of this type short-circuit legislatures. Council members and legislators hear all the cries for money and for relief. It is their job to decide who gets taxed, how much, and who gets the benefits, and how much. It is a messy process, but there is a concern for trade-offs and for budget totals. That process has given us some tax support of child care. If it is not enough, it can be changed the usual way.
Council members are holding their noses, not sure what to do with this tax on Seattle's favorite drinks. There is a thought of putting it on a later ballot, perhaps in the spring or fall of 2003.
But time will not improve it; it will be as obnoxious then as now.
