12 January 2011

When Taxation Directly Costs People Jobs

The law of unintended consequences means that the consequences of your actions, always have the adverse affect to that which is desired.

In other words, when Baltimore city attempted to raise revenues by instituting a $.04 per bottle tax on certain beverages that included soda and beer, the citizens said "nuh uh!"  The tax scheme was dropped for a short time but like any good tax legislation, it zombie'd its way through the City Council at half its original proposal, $.02 per bottle tax.  Needless to say, the citizenry and business was ignored, and politicians did what they pleased, budget and sanity be damned.  

Flash forward to this week:  Pepsi is a manufacture in Baltimore as it produces soft drinks and distributes products from its facility in the city.  Well, used to manufacture would be a better term now, since the 70 odd jobs associated with production will go by the wayside.  The tax was obviously necessary to plug the $121 million revenue hole in a $1.2 billion budget, but I'm sure the good people that just lost their jobs as a direct result of this new law will understand.  After all, it's not like PepsiCo made the decision based in part on the passage of this regressive tax.  NOooooooo, big business doesn't make decisions that benefit their shareholders (owners).  

Seventy plus jobs were an insignificant trade off for the tax that is destine for failure.  When the jurisdictions around the city don't have the same tax, it is unlikely that the city's residents will participate 100% in the tax.  As the saying in Argentina goes, "avoiding taxes is a national pastime."  Meaning, city residents who wish not to be complicit in the city's tax schemes can simply walk, ride their bike, take the bus, or drive their car into the counties to purchase their Colt 45s and Mountain Dews.  (I dew too, just for the record).

As always, when it moves, tax it, if it keeps moving, regulate it, and when it up and leaves you, subsidize it!  Guess we'll need to increase that $.02 per bottle tax back to $.04 to subsidize PepsiCo's enticement to bring back the lost jobs in the next city budget cycle, right?

1 comment:

  1. that tax is ridiculous. WAY TO FAIL FURTHER, BALTIMORE.