Chicago To Have a Special Tax on Bottled Water: A First in the Nation

The Chicago Tribune reports on the high tax city of Chicago:

Chicago is set to impose a 5-cent tax on bottled water on Jan. 1, becoming the first major U.S. city to demand such a surcharge. The move -- which officials predict will secure an extra $10.5 million annually -- will help the city plug a budget hole by building on the growing disdain for environmentally suspect bottles.

In the last year, the tide has turned on bottled water, once admired as a healthy alternative to soft drinks. Now, as environmentalists take aim at the clear plastic bottles, politicians can take their own potshots.

Critics of the tax warn it could create a black market for water and spur consumers to shop in neighboring towns where a case of water will cost significantly less. While convenience store or vending machine water may only increase from $1.25 to $1.30 per bottle, the average cost of a 24-pack will go from $3.99 to $5.19, a 30 percent hike.

With 90 percent of bottled water sales consisting of cases sold at supermarkets, retail experts predict the tax will hurt local grocers as customers go outside the city to save money on water. The bottled water industry expects a 50 percent drop in Chicago sales, putting a dent in anticipated revenue from the tax.

"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. "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."

The greedy and ethically challenged politicians who run Chicago sure know how to drive businesses, jobs ,and population elsewhere.