The U.S. bottle water industry is now worth an estimated $11 billion per year, and one city in America has decided it wants a piece of the action. From Jan 1st 2008 Chicago will impose a 5 cent tax on bottled H2O, becoming the first city in America to do so. The city hopes to raise an additional $10.5 million in revenue with the new tax to help with their budget deficit.
Locals are worried that the tax will create a black market for the beverage however, with the average price of a 24 bottle case increasing from $3.99 to $5.19, a rise of $1.20 which represents a 30% increase. "Just like people go to Indiana to buy cheaper cigarettes and gas, people are going to be going outside Chicago to buy bottled water," said David Vite, president of the Illinois Retail Merchants Association, in an interview with the Chicago Tribune. "Once they're at the grocery store, they're going to do more than just buy bottled water. They'll do all their grocery shopping there."_
Once welcomed as a healthy alternative to soda (which sadly Americans still gulp down more of), in recent years bottled water's image has been tarnished by the increasing toll it takes on the environment. The Earth Policy Institute quantifies the resources we're pouring down the drain, estimating that 17 million barrels of oil are used each year to manufacture bottles for water consumed in America alone, which it claims is enough to fuel more than 1 million U.S. cars for a year. And since the Container Recycling Institute estimates Americans throw away 60 million of these bottles a day, with only a fraction being recycled, the damage continues long after the water is drunk.
The question is, is this new surcharge:
- A: A step forward for the environment.
- B: A tax on healthy habits (soda comes in bottles and cans and has a similar eco-toll, but what would you rather people drink?).
- C: Another ruse to help politicians balance their blubber-filled budgets.
- D: An attention-grabbing stunt aimed at eco-aware voters.
We think the answer’s E: All of the above. They'll be taxing air next.
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