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In our view: Candy Confusion

Not only is it a new tax on sweets, it's another unfunded mandate from state

The Columbian
Published: June 29, 2010, 12:00am

Wasting nary a moment studying the difference between a Butterfinger and a Nestle Crunch, Initiative 1107 promoters are trying to repeal a law that taxes the former but not the latter. I-1107 targets what is known more popularly as the soda pop tax, largely because the American Beverage Association has pumped more than $1 million into supporting it. But for reasons described by Cami Joner in a Sunday Columbian story, the new law might just as well be called the candy tax.

For a month now, sales tax has been applied to many (but not all) candy products as well as bottled water. On Thursday, the sales tax will be applied to soda pop. This will yield about $300 million over three years for a state facing chronic budget shortfalls. I-1107 supporters say they’ll turn in 340,000 petition signatures on Friday, to cover the 241,153 required to get on the Nov. 2 ballot.

It’s easy to understand why so many people would sign I-1107 petitions. In addition to surging the state into the food-taxing arena, there’s the unfunded mandate. At the Plaid Pantry chain, staff members spent several days entering 2,000 candy bar codes into point-of-sale equipment. At Fred Meyer, 20 workers from three departments worked long hours setting up the stores for taxable candy. This unfunded mandate of private-sector work is caused by the fact that candy that contains flour is exempt, but others are not.

Beyond the big boys, imagine the burden this places on mom-and-pop stores. “It’s really complicated,” said Yong Kim, owner and operator of a convenience store in east Vancouver. Some help has been provided by candy sales representatives, but Kim said, when in doubt, he rings up the tax. Obviously that’s unfair to the consumer, this clumsy over-collection of taxes, but who can blame the overworked store operator?

What makes the problem worse is the cavalier attitude shown by state officials. “You can’t fault the stores for collecting too much tax. It’s when they don’t collect it that it becomes a problem,” said Mike Gowrylow, state revenue department spokesman, quoted in Joner’s story. What an absurd approach. People would have more confidence in state bureaucrats if the revenue folks applied as much vigilance to over-collecting taxes as to under-collecting taxes.

Here we’ve got large chains devoting massive resources to getting it right — collecting a tax that never should’ve been created in the first place — and the mom-and-poppers are burning the midnight oil trying to get it right, but the state only worries about collecting too little.

That kind of sloppiness is one reason I-1107 signature collectors have been so successful. Another reason is the tax camel’s nose poking into the grocery tent. A story in The Seattle Times contained this quote from Robert Gara of the initiative’s campaign staff: “What we’re worried about is, these taxes set a dangerous precedent that politicians in Olympia can reach deep into the grocery carts of hardworking families.”

This Band-Aid approach to trying to solve the state’s money woes is simply silly. If the state doesn’t take a difficult but necessary approach to state spending — the biggest part being salaries and benefits — we won’t even come close to solving this problem.

Defenders of the new taxes on candy, bottled water and soft drinks point out that the taxes are only temporary (set to expire in 2013), they’re limited and not broad grocery taxes, and about two dozen states have done the same thing. We don’t trust that first promise, the second excuse is refuted by the history of our tax-hungry state and the third defense is countered by the fact that many other states have not followed suit. Yet. The new taxes on candy, soft drinks and bottled water are confusing and unfair to already-overburdened taxpayers.

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