“While the sales tax rate in North Carolina is 5.75 percent (plus another 2 percent in most localities), movies and other entertainment, alcoholic beverages, tobacco products, hotel rooms, and rental cars are all taxed at higher rates.
“In a free society the purpose of a tax system is simply to raise money for the operations of government. It should not be used to punish activities that are disfavored by politicians or to reward activities that politicians consider virtuous. Indeed, principles of both justice and economic efficiency would suggest that the tax system should be neutral with respect to people’s freely made choices.”
That will slow down the adults who supply them. Or at least make them think.
This is almost common knowledge:
“Rather than subsidizing the production of unhealthful foods, we should turn the tables and tax things like soda, French fries, doughnuts and hyperprocessed snacks. The resulting income should be earmarked for a program that encourages a sound diet for Americans by making healthy food more affordable and widely available.”
A comprehensive proposal involves a lot of line drawing. Even a tax on candy makes you decide about Kit Kats and Twix: candy or not? Here’s a definition that says not:
“Candy means a preparation of sugar, honey or other natural or artificial sweeteners in combination with chocolate, fruit, nuts or other ingredients or flavorings in the form of bars, drops, or pieces. Candy shall not include any preparation containing flour and shall require no refrigeration.”
If that’s too complicated, we could just tax sugar.
The multinationals argue that getting this tax break will allow them to hire workers. But this argument has three problems. First, corporations have plenty of cash already. Second, we tried this kind of amnesty before, in 2004’s Great American Jobs Act Tax Caper (see Charles I. Kingson’s article in the Tax Law Review) and they just distributed the cash to shareholders. Third, if we let the multinationals get away with this money grab, they’ll be back again and again. Plus all the conventional wisdom is that small companies are the ones that create the jobs.
If this is a done deal, Congress should at least (1) push to end future deferral of U.S. tax on foreign earnings to prevent future amnesties, (2) push for a repatriation rate of 20 percent or more, and (3) reject any face-saving tracing of funds: money is fungible, and tracing it is futile.
Somebody has got to pay for government. Singling out huge multinationals for a tax break does not seem like a good idea right now.