Editor’s note: This commentary is by Marc Sherman, who is vice chair of government relations for the Vermont Retail & Grocers Association and owner of Stowe Mercantile and The Boutique in Stowe.
[T]housands of Vermonters from all corners of the state representing small grocers, country stores, artisan beverage makers, and concerned citizens have joined to form the Stop the Vermont Beverage Tax Coalition because this policy is the wrong direction for our state. Vermont rejected a beverage tax in 2011, 2013 and 2014. Now, only a few weeks into 2015, some are pushing once again for new beverages taxes on Vermonters. The latest proposal calls for a $0.02 per ounce excise tax on beverages with added sugar that would be applied to the distributor and then passed on to grocers and retailers and ultimately to Vermonters. These beverages include soft drinks, iced teas, sports drinks, kombucha, and even local favorites like Rookie’s Root Beer and Vermont Sweetwater.
The Vermont Retail & Grocers Association, of which I am a member, is particularly concerned about this tax for a number of important reasons.
First, this is a hidden tax on consumers because it will be levied on distributors first and then passed on to consumers. Without getting too far into the weeds, what this means is that distributors will recoup the cost of this tax by increasing the cost of the products they distribute which could include non-sweetened beverages and grocery items. This proposal could lead to an increase in grocery costs for already struggling families.
We should support local merchants and grocers with proposals that ease the burden of high taxes not impose new ones.
Second, this is a tax that is projected to raise $30 million dollars. This is not a modest tax on soft drinks, let’s call it what it is, a massive tax on some grocery items. Families could see as much as a 60 percent increase in the cost of common beverages.
Third, this is a regressive tax meaning that low- and middle-income Vermonters will be the most impacted by the tax. As we all know, our economy has struggled to recover from the recession and this is not the time to increase taxes on the poorest Vermonters.
Lastly, our downtowns and village centers, anchored by village and country stores are the heart of most Vermont communities and must be protected. This proposal threatens their ability to compete and when coupled with high taxes and high cost of doing business, policies like this make competing for business even more difficult. In addition, the adverse impacts of our tax policies are even more substantial in our border towns – as the costs for goods go up here – more Vermonters purchase everyday items in neighboring New York or New Hampshire.
The proponents of this tax will tell you that their motivation is public health. We agree that increased education and awareness about the need for balance in one’s diet and the importance of regular exercise is critical to the overall health of Vermonters. We disagree that taxing Vermonters is an appropriate or effective way to get them to do what you want. We believe that what Vermonters eat, drink and feed their family is their choice and not the government’s to make. Proponents of this tax will also claim that this tax can be part of a solution to our current state budget challenges but unfair taxes on Vermonters who are least able to afford them is no way to balance the budget.
If we want to get serious about obesity, it starts with education – not laws and regulation. We should support local merchants and grocers with proposals that ease the burden of high taxes not impose new ones. It’s time for our elected officials to work together to build a responsible and sustainable budget that supports businesses and creates jobs.
