Tuesday, May 18, 2010

The difficulty of social engineering via fiscal policy

As they struggle with budget deficits, states from New York to Washington are looking to candy and soda taxes to help bridge the gap. Now comes the hard part: Defining candy.

In Washington, a new candy tax will apply to Butterfinger candy bars, yet Kit-Kat wafers remain excise free (this because the law exempts foods with flour in them). There is also confusion in Colorado, where Kit-Kats are also untaxed, but Twix bars face levies. And after Illinois passed a candy tax last year, retailers in Chicago were unsure if Twix Bars — some of which contain flour and peanut butter — were food or candy.
--Conor Dougherty, WSJ, on poor aim

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