Chicago Alderman Seeking Bottled Water Tax

August 14, 2007

A Chicago alderman has come to the conclusion that bottled water imposes negative costs on society and must be taxed. Oh, and he needs to fill a budget hole. From CBS 2 Chicago:

Cooling off with bottled water could soon cost you more within the Chicago city limits if one alderman has his way.

As CBS 2’s Kristyn Hartman reports, Ald. George Cardenas (12th) wants to slap a tax of up to 25 cents on the cost of every bottle to help close a $217 million budget gap.

“People enjoy jogging or driving with a bottle of water. There’s a cost associated with this behavior. You have to pay for it,” said Cardenas, one of Mayor Richard M. Daley’s staunchest City Council supporters.

Cardenas noted that there’s a nearly $40 million shortfall in the city’s water and sewer funds, in part because of a decline in water usage.

“How is this possible when we have a water system that’s won honors? It’s because bottled water has become a $15 billion industry that’s growing at a rate of 20 to 30 percent a year,” he said.

Cardenas also said a bottled water tax would help the environment by dissuading people from buying the plastic bottles that end up in landfills.

The only legitimate argument Cardenas has is that bottled water may have an adverse effect on the environment. Merely because the city has a budget gap does not mean that he should arbitrarily pick something to tax to fill that gap. Such policies are totalitarian in nature and are not consistent with living in a free society.

If the city needs to fill a budget gap, it should either raise taxes via a broad-based tax or cut spending. However, if bottled water does impose external costs on others that are not paid for by the consumers or producers of bottled water, then it should have a special tax, based on the damage done to the environment. (In other words, the tax would be a function of the bottle type.) Also, everything sold in such environment-harming containers should be subjected to a similar tax as well.

But initial reaction appears to show that people aren’t too happy with this proposal. Some Windy City resident quotes against the proposal stood out in the article, showing evidence of the tyranny that is possible in a democracy and explaining why cigarette taxes are so popular:

“Let them tax cigarettes, not water,” said Chicago resident Brian Lynch.

“Ten to 20, that’s crazy. It’s not cigarettes or anything, it’s bottled water, so that’s ridiculous,” added Chicago resident Lazzerick Young. “I’d probably go towards filtered water, maybe, and not do the bottled water.”

“We’re going to have to vote him out, because that’s not good,” said Justina Miles. “I buy a lot of bottled water.”

These residents are basically saying, It’s okay to tax somebody else for some special activity that they engage in (like smokers), but, whatever you do, don’t tax me for what I consume. Such thinking is unfortunately why we get such terrible fiscal policy in many places throughout the country, especially Chicago — the home of the soda pop tax.


Topics


Related Articles