Yuppie Tax Unconscionable

Beverage and Retail Industries Seek to Invalidate Tax on Bottled Water In
Chicago

Seeks to protect grocers and ultimately consumers from unconstitutional 5-cent
tax
WASHINGTON, Jan. 4 /PRNewswire-USNewswire/

The beverage and retail
industries took a stand today for their already over-taxed customers by filing
a lawsuit seeking to invalidate the city of Chicago's new 5-cent-per-bottle tax on bottled water, which amounts to an astounding 30 percent tax on a case of safe, healthy bottled water.

The first-of-its-kind tax, which took effect Jan. 1, is being paid by Chicago
retailers and ultimately consumers who buy their water in the city of Chicago.
The $10.5 million the city claims it will raise from taxing this healthy
product is earmarked solely for general revenue purposes, not for
environmental purposes.

"We're going to stand up for our customers, both retailers and consumers who
are being forced to pay a tax on a healthy product like bottled water," said
Susan Neely, president of the American Beverage Association, which represents
the non-alcoholic beverage industry including bottled water producers. "We're
not just going to take a tax like this without raising a challenge. It's
disconcerting that government spending is leading government officials to
start taxing products that are good for you simply to cover their budget
deficits. Like most Americans, we're confident Chicagoans are tired of being
taxed for every facet of their life, including drinking more water."

The lawsuit argues that the tax should be invalidated because:

1.) The practical incidence of the tax falls squarely on retailers and
wholesalers. The city has no authority to impose such a tax.

2.) Because there is no real and substantial difference to support singling
out bottled water, the tax is unconstitutional and violates the Uniformity
Clause of the Illinois Constitution.

Okay, let me weigh in here for a second - as this is obviously cutn'dapasted from a PR note gingerly left on the AP ticker machine ... It's only on bottled water. Not Gatoraid, not Coke, not Pepsi (yet), or any other beverage that is in a plastic container. This is obviously just a ploy to pull in 10.5 million from tourists and yuppies... but it's short sited.

Here are just a few facts about the negative impact
of the tax:

-- The 5-cent-per-bottle tax amounts to a $1.20 tax on a typical $3.99 case of
bottled water - a whopping 30 percent tax. And on a product that's good for
you no less. This gaurantees that anyone who can - will - leave the city to buy their cases of bottled water. This actually creates a black market for bottled water.

-- Attorneys also argue state law prohibits a tax that would treat competitors differently -- for example, bottled water distributors, but not soda distributors. Forget that the two most popular brands ARE from soda distributors...


-- The tax will ultimately be paid by consumers, giving them yet another
reason to shop at suburban stores. This will cost Chicago retailers business
and the city revenues from all goods and services these shoppers will now buy
while in the suburbs. (See Chicago Tribune story, Dec. 24th)

-- Roughly 4,500 Chicago-area jobs accounting for $270 million in wages are
linked to bottled water. These jobs are held by real, working families - truck
drivers, mom-and-pop store owners, grocery clerks and bottling factory
workers. This tax certainly threatens a good portion of those jobs in Chicago,
all at a time when economic and job security concerns are No. 1 on the minds
of Americans. (AP poll, Dec. 28.)

-- The tax disproportionately harms low-income families and seniors, who spend
a larger part of their income on food. Ah... that segment isn't probably out buying this product, gang. This one is pretty weak... You might want to actually have a photo to go along with this...

"I'm not aware of any product, service or business in Illinois that gets taxed
at 30 percent," Vite said. "During this time when consumers are growing more
concerned about the economy, we should be making it easier for them to buy
groceries and other goods, not burdening them with more taxes. Leave their
pocketbooks alone." Cigarettes?

Neely argued that lawmakers who try to use the environment as justification
for this tax are simply resorting to sound-bite environmentalism that has
little impact. Further, the revenues are going directly to the city budget
coffers, not environmental programs. Which is what I was saying all along - it's a bullsh*t tax without the salesmanship to prove it otherwise. It's like the blue bag program. Speaking of recycling and the environment - how about a deposit? Perhaps a requirement that all plastic water bottles in Chicago are made from corn plastic? It'd sure make ADM happy, and our downstate farmers. Throw 'em a subsidy like that and MAYBE THEY'LL FUND THE CTA!

Besides, water bottles are 100 percent recyclable and account for less than
one-third of 1 percent of the municipal waste stream. And the amount of oil
used to make plastic water bottles accounts for less than 5/100 of 1 percent
of American oil consumption. By making its bottles lighter and lighter,
industry makes strides each year in further reducing its already minimal
impact. How about the billions of tons of gas to transport soda and water to the 7-11 so that you can buy it?

Of course, the simplest way to ease any environmental concerns is to drop the
fully recyclable bottle in a recycling bin after enjoying the water.

"This tax just defies common sense any way you look at it," Neely said. "We're
hopeful this lawsuit will help common sense reign again for the sake of our
customers."

Cap'n's Bottom Line: The lawsuit will cost over 10.5 million dollars to defend. The city, if they actually are concerned about their bottom line - should repeal the tax Monday morning and walk away.