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Reflections In A Cup: On Water and Taxes

On Water and Taxes

February 28, 2008
By Stuart Daw


The city of Chicago has announced its intention to levy a tax of five cents per bottle on bottled water.

The city of Chicago has announced its intention to levy a tax of five cents per bottle on bottled water.

Of course, this has set in motion a flurry of activity on behalf of several trade associations, including the American Beverage Association and the International Bottled Water Association. They will in effect be defending what philosopher Ayn Rand called America’s most persecuted minority, the businessman.

This proposed tax on water is only symptomatic of a much larger philosophic issue: the encroachment of government into our lives, with politicians and their bureaucratic enforcers hungry to tax everything in sight to gain power over the populace. And they grasp for issues that can be used as rationalizations for legislative action enforcing new taxes, often to pay for questionable programs they have hatched in the past but can’t finance.


The relatively new, current demand for bottled drinking water is somewhat symbolic, providing just such an excuse for government action.

Thales, the earliest of the Greek philosophers, dating back to the sixth century B.C., believed that water was the one basic element in the universe. And I confess to having a psychological thing about water myself. As a little boy growing up in the Great Depression in southwestern Saskatchewan, I saw our family of nine having to buy our water from the local water man named “Ormy” Attwell, for five cents a pail. So today’s proposed tax on a little bottle which is barely more than a cupful of water, would be equivalent to the cost of a full pail of water in the 1930s.

Elrose was like a miniature model of a city. With a 1930s population of only around 300 souls, but serving a large farming community, it had four grain elevators, a train station, two restaurants, two grocery stores, two barbershops, a pharmacy, a hotel, a poolroom, three implement and motor vehicle dealers, a doctor, a hospital, a newspaper, a hardware store, and three churches.

But there was no water in our little village. The town fathers had apparently drilled down 700 feet only to find alkaline slime, and the nearest drinking water well was three miles south of town, with a capacity of barely 500 gallons per day.

So Ormy, with his team of horses and a wooden wagon, would trek the long two-way trip three times a week to haul water for the people of the village. I remember him standing on the back stoop of our home, one dripping pail in each hand saying, “How many today, Mrs. Daw?” And my mother, on a very, very tight budget (no credit cards then), would buy two or three pails, and have Ormy dump them into a small, galvanized barrel in the kitchen.

Thus the water served its duty for straight drinking, for coffee and tea, for laundry, and for that much-hated but very necessary Saturday night bath. Each of us, one at a time of course, bathed standing up in a small tub with perhaps two inches of water, soap and washcloth in hand. That water became progressively more “used” as family members took their turn and I, being the youngest, got to “enjoy” the last bath.

Thus water was not just a necessity, it was a luxury, and was treated accordingly. Given the ethics prevailing in that era, no bureaucrat would dare levy a tax on water. In fact, most North American jurisdictions have traditionally conceded that food products necessary for life should not be subject to sales tax.

But ironically Saskatchewan holds another bit of notoriety in that it became the first socialist government in North America, electing what was then called the Cooperative Commonwealth Federation (CCF, now of course, the NDP) in the 1940s. They promptly installed a three per cent “Education Tax.”

Of course by now all political parties in North America have gradually become relatively socialistic, whether or not that word is built into their names, so the electorate is used to the onward march of statism over individual rights.

Modern politicians must lay awake nights fantasizing about how to raise new revenues while achieving better control over our behaviour. And they probably never noticed water as a potential medium for fleecing the public until the time came when they couldn’t help but see the modern, fashionable trend of many people imbibing the stuff that they used to drink only when thirsty. “Oh! And those nasty plastic bottles! That’ll be our excuse! And besides, people are drinking more than they need to, so water is therefore a luxury. Let’s tax it!”

It’s troubling to see trade associations groveling before little bureaucrats, begging for mercy with respect to taxes on individual products, thus conceding to those people the moral right to be involved in the field of economics in the first place. The only proper role of governments in a free society is to protect individual rights by maintaining an armed force to protect us from the outside, police to protect us at home, and a judiciary to settle disputes and enforce contracts.

And it is cold comfort for coffee people to be flying under the radar while water venders are being persecuted. Coffee could be next. After all, it takes energy to roast coffee to around 430 degrees. The bureaucrats used the sight of smoke coming out of roasting plants to demand afterburners in the late 1960s (most of what appeared as smoke was actually steam). That took more energy and thus higher costs in achieving the necessary temperature of over 800
degrees Fahrenheit in the afterburner.

But if the “smoke” was gone, there was still the beautiful aroma of roasted coffee in the immediate neighbourhood. Too beautiful for the bureaucrats, who insisted we boost the temperature in the afterburners to around 1600 degrees Fahrenheit, so that even the most sensitive puppy dog couldn’t be offended by it.

Now the officials may go bananas in trying to resolve their own irrational
dilemma. They force us to use more energy on the one hand, and yet they demand that we become more energy efficient while preserving the “environment.”

We can now hold our collective breaths while what economist Thomas Sowell calls the “deep thinkers” in government address this non-problem.
Once a population of any country has been weaned to accept the morality of a government’s “right” to extract money from individuals for the so-called “common good,” it’s deuces wild, and one never knows what or whom will be hit next. One can only hope for our various trade associations to stand tall and fight, not just for bottled water, but also on something called principle.