There is a nearly flawless truth when it comes to liberal government policies… they have absolutely no idea how money and finance works. And whether it is the implementation of Obamacare at the Federal level, which has in just a few short years destroyed affordable healthcare in America, or the implementation of higher minimum wages, which are causing restaurants and other small businesses to either have to move or close their doors, when monetary policy is created to try to provide short-term fixes for long-term problems, the solution almost always exacerbates the issue.
And all one has to do is look at the majority of states and cities that are run by liberal politicians to see that besides the outrageous taxation their citizens have had to endure, they also embody the largest number of people on welfare as well as some of the largest debts held by municipalities.
Which brings us to the city of Seattle, and their latest attempt to legislate morality under the guise of monetary policy. And if their ongoing rise in small business closures due to passing new minimum wage laws wasn’t enough, they now want to follow in Philadelphia’s footsteps in passing a tax on many everyday beverages that contain even a trace of sugar.
Maybe the city of Seattle will recover from the serious job market weaknesses that it has experienced since last April when its minimum wage law began imposing significantly higher labor costs on the city’s employers. Considering that Seattle had the largest three-month loss of jobs in city history between September and November last year following the first phase of wage hikes on the way to $15 and hour, it might be the case that the early evidence suggests that this is a “radical model for the rest of the nation to NOT follow. – Forbes
Following in the footsteps of Boulder, Philadelphia, Oakland and San Francisco, Seattle has approved its own version of a job-killing soda tax.
In a 7-1 vote with one councilmember absent, the Seattle City Council passed the tax on soda distributors by an overwhelming margin. The council ultimately agreed on a tax rate of $1.75 per ounce, which translates to about $1.18 for a 2-litre bottle of soda. Unless opponents of the measure succeed in blocking it, the tax will be collected beginning next year, the Seattle Times reported.
A coalition involving restaurant owners, grocery owners and the local chamber of commerce opposed the bill, which was backed by the American Heart Association. One grocery owner was quoted in The Seattle Times discussing how the tax would hurt his business. Husik Harutyunyan, who owns a small grocery store in North Seattle, urged the council to reject the tax. He said his customers may begin buying soda in Shoreline, Wash. if the tax leads him to raise his prices.
Onerous taxes do not work in attempting to legislate morality, as individuals will simply travel farther distances where they can get what they want, and at normally cheaper prices. Simply take a look at states in the South who for years had ‘dry county’ laws making it illegal to purchase alcohol within their domains, and the fact that people simply went across the border to buy liquor anytime they saw fit.
Prohibiting something, or making it too costly to purchase, has in every time period in history created black markets, or opportunities for others to provide those goods and services when a local or national government legislates on them for inane reasons. And I’m sure in a few years when even more jobs are lost, and even more businesses close down in Seattle because of this tax, they will blame everyone but themselves and then try to make up the lost revenue with a new scheme that will drive the cycle even more towards insolvency and bankruptcy.
Kenneth Schortgen Jr is a writer for The Daily Economist, Secretsofthefed.com, Roguemoney.net, and Viral Liberty, and hosts the popular youtube podcast on Mondays, Wednesdays and Fridays. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.