Hey, that picture is of my local coffee shop, Victrola. They don't like the proposed tax:SEATTLE, Sept. 1 - In these lean times, cash-poor states and cities across the country have pondered and enacted a host of creative taxes and fees, raising the cost of snowmobiling in Montana, trout fishing in New Mexico and marrying in Massachusetts.
But now there is the proposed espresso tax in Seattle.
Seattle is the coffee capital of the nation, the birthplace of Starbucks, a caffeine-crazed city where espresso is available at gas stations, hospitals, roadside stands and drive-through windows. Seattle is so identified with the liquid produced by forcing steam through ground coffee beans that an espresso tax is like a tax on the city's very soul.
The formal name of the espresso tax, which would add 10 cents to the cost of every beverage served in Seattle containing a half-ounce or more of espresso -- but would not apply to regular drip coffee -- is Initiative 77. Sponsored by the Early Learning and Care Campaign, it will go before voters on Sept. 16.
"I think it is a bad public policy," said Jen Strongin, a co-owner of Victrola Coffee, adding that she would probably raise the price of espresso drinks by 10 cents if the tax were approved. "I think it sets a precedent for future taxation in the city that would be a bad idea: taxing specialty items like espresso or salmon, something that someone deems a luxury item."(I'd like Victrola a whole lot more if they cut back on the live music. I think it's there to keep people from staying too long).
Anyway, is this tax progressive? The initiative's sponsor says yes:
Mr. Burbank said the tax was a fairer way to raise money at a time when the economy was weak because it would affect people with higher incomes more than it would affect the poor.Or as Helen Lovejoy put it, "Won't somebody please think of the children?!"
"Lower-income people drink less espresso than upper-middle-class people," he said. "I've already had two tall double lattes, and I'll probably get another today."
He added: "If you don't want to pay it, you can buy drip coffee or tea. But I believe people are more likely to want to consume espresso if their morning purchase doesn't just go to giving them a buzz but goes to children."
On the whole, I would bet this tax is more regressive than progressive. Based solely on my experience as a Seattleite, a person making $20,000 is probably drinking up to 5 lattes/week, usually on the way to work. A person making $40,000 is probably having 10/week, one in the morning, and another in the afternoon. Not many people have more than that. So if you're making $100,000/year, you're paying the same in this tax as someone making $40,000. Granted, the richer person is probably getting a more expensive latte, but that doesn't matter, because the tax is fixed at 10 cents per drink. So at the extreme low end, say, for the homeless, they're paying nothing, but after that it's regressive.
According to research by the District of Columbia (page 27), Seattle's city and state tax burden is the 4th more regressive among the largest cities in the 50 states and DC, after Anchorage, Las Vegas, and Souix Falls. A family making $25,000/year in Seattle pays 7.5% of its income in various taxes, while a family making $150,000/year only pays 6.3%. For a city that fancies itself progressive, that ought to be a surprise.
As for me, since I don't like coffee, I'll pay no latte tax.
