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May 12 2017

Shifting Taxes From One Industry To Another Helps No One

I’m always going to cheer proposals to eliminate sales taxes, even when the proposal is part of some sort of silly social justice cause.

That’s how California Assembly members Lorena Gonzalez Fletcher and Christina Garcia are selling their latest attempt to eliminate taxes on tampons and diapers, saying the state shouldn’t tax necessities for women and children.

“There is no happy hour for menstruation,” Garcia told the LA Times.

Groan.

Setting aside the annoying “taxing tampons is tyranny” talk, at first I was happy to hear about this tax cut. But then came the poison pill. It turns out that instead of just eliminating sales taxes on tampons and diapers, Fletcher and Garcia’s proposal (which failed) increased taxes on hard liquor in order to make up the gap in tax revenues.

To some, this may seem like a fair trade. You remove the tax from necessities and add them to luxuries—like hard liquor. Yet, as David Ozgo of the Distilled Spirits Council—a DC-based trade association that represents spirits manufacturers—reminded Assembly members at a hearing on the proposal last week, shifting taxes from one industry to another often carries negative unintended consequences, like job loss. In fact, according to some estimates, this two-cent per drink tax increase will cost the liquor industry $170 million in retail sales, resulting in 2,400 job losses.

And some of those job losses will happen to women—ya know, the very types of people Fletcher and Garcia are trying to help with their misguided tax relief bill.

Ozgo, referring to the baby of one of the hearing witnesses who testified about the cost of diapers, made this important observation:

Mr. Chairman, I would like to go on record saying, I too like babies…This is a particularly cute one. Unfortunately, there is nothing very cute about an unemployed cocktail waitress.

Let’s hope Fletcher and Gonzalez remember that cocktail waitress the next time they try to help women.

 

 

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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