Our View: Limited tax on groceries might work

With budgetary shortfalls causing both local and state governments to cut back on spending, a number of ideas have come about as possible solutions to budget problems.

One of those ideas is reinstating a grocery tax. The grocery tax was ended by the Wyoming Legislature in 2006, which was during the period when the state received incredible budget surpluses as a result of the booming natural gas industry. While we’re not sure completely reinstating the tax is a good idea, there is an alternative that would probably have more support with legislators. Arguments against food taxes primarily focus on how the tax impacts low-income shoppers, as it decreases their buying power at the supermarket. They would be forced to make due with less as they paid taxes on basic necessities, which in Sweetwater County would result in 6 percent being added to the final bill. We wouldn’t advocate for a full reinstatement, but a reinstatement on certain items.

We think items like fresh and canned produce, dairy, meat and baking supplies should be excluded from taxation. However, items like candy, convenience meals, soft drinks and other prepared foods should be taxed. Also, taxes on alcoholic beverages should see slight increases as well.

We believe the tax would help in two avenues. First and most obvious is the state and municipalities would receive more funding through the sales taxes, but the tax would passively promote healthy eating habits since fresh fruits and produce would be exempt. In regards to alcohol, we don’t see an issue with sales tax on alcoholic beverages increasing 2-3 percent in order to provide more revenue to state and local governments.

The grocery tax would impact only nonessential foods. They’re the foods a person could live without and as such, should be considered separately. We think keeping essential groceries exempt would help residents with lower incomes as essentials wouldn’t be taxed, while giving them the ability to treat themselves to other taxed items.

With the current economic situation impacting state and local revenues, we don’t think budgets can be reigned in without impacting services provided to residents. Tax increases in some areas, such as on alcoholic beverages or nonessential groceries, can help provide some funding to lessen the financial impact we’re feeling in Wyoming.

While there isn’t a perfect method of reclaiming lost revenue, a limited grocery tax might be one of the less painful ways of recouping some of those funds.

 

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