Posts tagged: Washington sales tax
You can pretty much count on two consumer impacts from the recent new sales taxes imposed by Washington’s legislators, says Jeffrey LaFrance, a Washington State University professor.
So-called “sugar taxes” imposed on candy and gum will hardly change the consumption of Washington’s sweeth tooth community, said LaFrance, who is professor of agricultural and resource economics in Pullman.
That’s because the sales taxes on candy and gum are not large enough to force consumers to change their spending habits.
But the state’s new $1 a tax increase on packs of cigarettes will certainly lead to a notable decline in overall sales, said LaFrance.
Cigarettes are “unit elastic,” he explained. That means if cigarettes pre-tax were $6 a pack, the added tax of $1 will have a like size negative impact on demand. So $1 is roughly 16 percent of $6, and LaFrance said the impact should be about a 16 percent decline in cigarettes bought in the state.