Soda tax in Colorado: Are threats of cost increases a political scam?

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Plenty o' Republicans decried the removal of tax exemptions on soda, candy and several other products that Governor Bill Ritter signed into law yesterday. Gubernatorial hopeful Scott McInnis released a statement declaring, "This is a sad day for jobs, economic recovery and Colorado families."

When it comes to soda, at least, state rep Jack Pommer thinks that's an enormous overstatement, due in part to some price comparisons he just made across state lines. He discovered that a two-liter bottle of Coca-Cola that goes for $1.69 in Colorado goes for the exact same price in California and Texas, both of which have a 6.25 percent sales tax -- far higher than the 2.9 percent tax to be imposed here.

As Pommer sees it, "that shows there's more than enough flexibility in the prices where this shouldn't be a killer."

The price-comparison document Pommer assembled, on view below, suggests that soda prices have plenty of give in them. As he notes, "I've gone to some convenience stores, where small, medium and large are all the same price."

As for the suggestion that jobs will be lost because of the soda tax, Pommer says, "I don't think anybody will be laid off. I don't really see this making a difference at all. Let's say you're paying a buck for a 64-ounce soda. You put it in your cart, you get to the check out, and then you notice they added 2.9 percent sales tax to it. Are you really going to put it back? And when soda goes on sale, they drop the price significantly. So I don't think this is nearly enough to change people's buying behavior, and the idea that there are going to be massive job losses just doesn't make sense."

Here's a visual presentation of Pommer's research:

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