Bottled Drinking Water a New Tax Target in Chicago

Published December 1, 2007

The price of a bottle of water will climb at least 10 cents in Chicago if Mayor Richard M. Daley gets his way.

Daley in October proposed a 10 cents a bottle tax on water. He also proposes to raise taxes on real estate, gasoline, liquor, parking garages, lease transactions, telephone service, and restaurant meals.

The city estimates the total tax hike at about $193 million, with the bulk of the increase coming from a $108 million rise in the property tax.

Property, gasoline, liquor, and all the other items except bottled water are already taxed. They would simply be taxed more heavily.

The tax on bottled water, though, would be new.

Joe Doss, president and chief executive of the International Bottled Water Association, said a tax on bottled water likely would result in people drinking less-healthy beverages.

“When we have problems with obesity, heart disease, diabetes, it doesn’t make sense to discourage healthier alternatives,” Doss said.

Some advocates of taxing bottled water say the product should be taxed to reduce consumption, which would in turn reduce the number of plastic bottles produced.

But Doss notes plastic water bottles are much thinner than they were a few years ago, reducing the amount of plastic in them by 40 percent over the past five years. He noted bottled water makes up one-third of 1 percent of the waste stream in the United States, so reducing bottled water consumption would have virtually no impact on waste disposal efforts.

Steve Stanek ([email protected]) is managing editor of Budget & Tax News and a research fellow at The Heartland Institute.