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5/17/10

Rep. Pommer discovers the free market

Government raises business taxes; businesses pass on the cost to consumers. It's a simple equation, but one that consistently eludes the tax-and-spend meddlers at the Colorado statehouse.

Informed that the price of a vending-machine soda has increased by a dime or a quarter in some locations, Rep. Jack Pommer, D-Boulder told The Denver Post, that "it sounds like (vending companies) are taking advantage" of the tax to increase prices. "This tax isn't 10 cents (on a dollar). It's 2.9 cents."

The 2.9 cents is the tax exemption that Pommer and his Democratic colleagues ended for candy-and-soda sales. When industry objected, Pommer gave a soda-economics seminar at a committee hearing in January, documented by WhoSaidYouSaid under the headline, "Nickel and diming the citizens of Colorado to death."



http://www.youtube.com/v/bkYYT_y9BPA

"But there is no way that if you can sell small, medium and large [fountain sodas] for the same price; if you can charge anywhere from 90 cents to two dollars for a bottle of soda; you can offer it on sale; offer free refills; that this 2.9 percent tax is going to have any effect on sales, at all," said Pommer.

So not only is Pommer a government tax-policy expert, he apparently understands the costs, manufacture and marketing of carbonated sugar water to such a degree that he can predict the effect on sales.

Well, we don't know whether sales of soda in Colorado have changed since the new tax went into effect May 1. But we do know that some vending machine companies have raised prices, which was entirely predictable.

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