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Soda Tax Fizzles In Chicago As Cook County Officials Cast Decisive 15-1 Repeal Vote

Summary:
In a shocking move that completely upends Chicago's endless pursuit of higher taxes and an overly-regulated nanny state, the Cook County Finance Committee took the unprecedented step of voting to actually repeal their unpopular 'soda tax' last night.  The 15-1 vote followed an outcry from local residents and small business retailers who say their soda ...

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In a shocking move that completely upends Chicago's endless pursuit of higher taxes and an overly-regulated nanny state, the Cook County Finance Committee took the unprecedented step of voting to actually repeal their unpopular 'soda tax' last night.  The 15-1 vote followed an outcry from local residents and small business retailers who say their soda sales crashed 90% after the original ban was passed.  Per ABC:

The vote to repeal the sweetened beverage tax was one spawned by revolt from people and business owners across the county, many who packed the board meeting Tuesday afternoon.

 

"I'm about 10 percent of where my soda sales used to be. It's really hurt me deeply in the pocket and my workers also. I'm very happy you are understanding this and going to repeal this tax," said Ken Blum, a blind vendor.

 

"I believe what we heard over the last ten and eleven months is that our residents are fed up, and they finally said enough. Tax fatigue has sunk in," said Cook County Board Commissioner Sean Morrison.

 

"I have heard from the people in my district overwhelmingly, the business owners, the retailers, as well union members in this building who are opposed to this tax," said Commissioner John Daley.

 

"Let me tell you I'm overjoyed and elated that this tax is going to go away. I mean the people in my district by an overwhelming majority don't want this tax," said Commissioner Richard Boykin.

The repeal of the tax still faces a vote from the full board which is expected later today.  That said, the repeal will not take effect until December 1, which is when the new budget is set to go into effect.

Of course, not everyone was happy with the repeal vote as Public Defender Amy Campanelli, who depends on dipping in the taxpayer-funded trough for her livelihood, complained that tax cuts would require her to make some difficult decisions.  Apparently Ms. Campanelli doesn't understand that that is kind of the point.

The calls for repeal were countered with concerns about the impact losing the projected $200 million in revenue will have on county services. Elected leaders made a last ditch effort to keep the tax at the meeting.

 

"To meet an 11 percent cut we would be subject to massive layoffs. My office in its present form would no longer exist. To meet the target number, we would have to eliminate approximately 134 positions from my 680 budgeted staff, or about 20 percent of my office. The effects would be nothing short of devastating," said Cook County Public Defender Amy Campanelli.

Meanwhile, a representative from the American Heart Association complained that she just can't see how "repealing this tax creates a healthier community." 

"I don't see how this repealing this tax creates a healthier community. I think you're going to see -- I think this is a recipe for disaster," said Julie Mirostaw with the American Heart Association.

Sure, and while you're at it maybe just apply a massive tax to fast food, all restaurant dishes that are fried, bacon, cheese, candy, pizza, processed meats...pretty much everything that Americans eat on a daily basis.  Perhaps when the nanny state of Illinois takes full control of every decision that its residents make then they will finally be able to mold the healthy population that Julie Mirostaw desires?

Then again, maybe local/state/federal government entities could just stop promoting poor health decisions by subsidizing junk food with taxpayer-funded entitlements like food stamps.

As we pointed out several months ago, a study released by the USDA offered a stunning look at just how much of the money spent on food stamps goes toward the purchase of soft drinks and other unnecessary junk foods.  Per the study, nearly $360mm, or 5.4% of the $6.6BN of food expenditures made by SNAP recipients, is spent on soft drinks alone.  In fact, soft drinks represent the single largest "commodity" purchased by SNAP participants with $100mm more spent on sodas than milk and $150mm more than beef.

Soft drinks were the top commodity bought by food stamp recipients shopping at outlets run by a single U.S. grocery retailer.

 

That is according to a new study released by the Food and Nutrition Service, the federal agency responsible for running the Supplemental Nutrition Assistance Program (SNAP), commonly known as the food stamp program.

 

By contrast, milk was the top commodity bought from the same retailer by customers not on food stamps.

 

In calendar year 2011, according to the study, food stamp recipients spent approximately $357,700,000 buying soft drinks from an enterprise the study reveals only as “a leading U.S. grocery retailer.”

 

That was more than they spent on any other “food” commodity—including milk ($253,700,000), ground beef ($201,000,000), “bag snacks” ($199,300,000) or “candy-packaged” ($96,200,000), which also ranked among the top purchases.

Soda Tax Fizzles In Chicago As Cook County Officials Cast Decisive 15-1 Repeal Vote

Even worse, when we added up all of the commodities that would typically be considered "junk food" (i.e. soft drinks, candy, cakes, energy drinks, etc.), we found that roughly $950mm, or just over 14% of the aggregate $6.6BN of food expenditures made by SNAP recipients, is spent on unnecessary, unhealthy products.

Soda Tax Fizzles In Chicago As Cook County Officials Cast Decisive 15-1 Repeal Vote

Of course, that kind of logic has no place in government.

Soda Tax Fizzles In Chicago As Cook County Officials Cast Decisive 15-1 Repeal Vote
Tyler Durden

Tyler Durden (a pseudonym) represents the idea that a return to truly efficient markets is a possibility and a necessity. After having experienced the inner workings of capitalism at various asset managers and advisors, Tyler believes that the current model is flawed and a deleveraging at every level of modern society is needed to reinspire the fundamental entrepreneurial spirit. Visit his blog: ZeroHedge (http://www.zerohedge.com/)

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