Illinois soda tax would hit low-income households hardest
A soda tax would fall upon those who can afford it least, and would serve only as another tax hike “solution” for a state that has a spending problem.
Proposed legislation before the Illinois Senate would implement a penny-per-ounce soda tax as a way to reduce soda consumption and raise even more state revenue.
Targeting an industry and its consumers does not make for sound public policy.
Neither does the fact that the tax would fall disproportionately upon low-income Illinoisans. The reverse-Robin Hood nature of the legislation should be indicated as a note to the bill.
According to Gallup, 45 percent of people with incomes of less than $30,000 drink regular soda, while one-third of those with incomes from $30,000-$74,999 drink regular soda. Only one-fifth of those with incomes of more than $75,000 drink regular soda.
A soda tax would fall upon those who can afford it least, and would serve only as another tax hike “solution” for a state that has a spending problem. Furthermore, state tobacco taxes have shown that “sin taxes” are inconsistent sources of revenue. A state cigarette tax that was projected to raise $350 million in annual tax revenue missed the mark by $130 million, leaving taxpayers on the hook for the difference.
Experience has proved that targeted taxation creates jobs in the black market for the products involved. The infrastructure for this underground industry is already in place, as cigarette taxes have created a black market for cigarettes in Illinois. Reduced Pepsi and Gatorade sales in Illinois would be partially offset by increased sales, and tax revenue, in Indiana and Wisconsin.