Should coffee be taxed?

Would you be prepared to pay more for your daily dose of caffeine?

People living in the so-called coffee capital of America, Seattle, are voting on whether to introduce a ten cent tax on lattes, cappuccinos and other espresso-based coffees.

The proposal is designed to raise millions of dollars for daycares for the children of low-income families.

But the scheme is being opposed by Starbucks - the coffee giant which is based in Seattle.

What do you think? Is it a good idea? Would you be prepared to pay that bit extra if you knew it was going to a good cause?

This debate is now closed. Read a selection of your comments below.

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The following comments reflect the balance of opinion we have received:

I don't see a huge problem with taxing coffee as it is not a necessity but rather an indulgence. I do think coffee is a rather arbitrary choice to tax, though. I have no faith, however, that the government will do what it says with the tax funds. State lotteries were supposed to raise funds for education, but hardly any of it goes to the school systems. Why should this be any different?
Forrest W., NYC - USA

I would have absolutely no problem paying the tax Kari Anne, California, USA

I drink at least one cappuccino a day, and I would have absolutely no problem paying the tax. I believe that most people who drink espresso will feel the same; I would imagine the demand is pretty inelastic. Washington State has implemented this program to fund Head Start, a program that, thanks to the current Administration, lost almost all of its funding. Desperate times call for desperate measures, and at least it's creative!
Kari Anne, California, USA

No tax on our coffee please! Such a simple pleasure should not be punished. The fairest taxes are levied in accordance with income, all of these "equal" levies on ordinary people is an outrage. Childcare and chid services should rightfully be provided for by income taxes, not as a punishment for people who love to drink coffee. There is no massive health issue here to justify it, as with smoking cigarettes.
Madeleine Dunn, USA

Why is it that politicians can raise millions of dollars to get themselves elected but they can't think of a way to fund social services from existing revenues? It is their own greed and mismanagement that forces them come up with these ludicrous ideas.
Elmyr, USA

Why not? I'm sick to death of colleagues and trend-following idiots who claim that they can't cope or do any work without their coffee fix in the morning. It only a drink! These are people who think nothing of spending stupid amounts on coffee, lining the pockets of big corporations who take advantage of third world workers.
Andy, UK

This is merely relieving the parents of the responsibility of raising their children Gm, USA

Call me insensitive, but why on earth are taxes being raised to provide daycares? This is merely relieving the parents of the responsibility of raising their children. Nobody told them to have children they can't afford. Now they seek to reduce incomes of others to pay for this! Will this lead to more 'low income families requiring more services leading to more taxes to pay for more service now required by more low income families and on and on. Pretty soon everyone is low income as all their income goes in taxes. A far better idea is keep your money and pay your own way! Not popular with the liberals, but the truth never is.
Gm, USA

President Bush has recently been very heavily criticized for giving many people in this country a $400-per-child tax rebate check to help stimulate the economy. Now, a state government wants to collect about $40 a year in taxes to pay for children's day care, and it is being very heavily criticized. Apparently, the only way to make people happy in this country is to do nothing!
Jon Jannicola, NYC, USA

I have never understood how the government is allowed to operate outside its budget. Its simple you get x amount of dollars and we spend it here and here and so forth. I do not know about you but I can't go to my boss and say "well, I need a new car and I am short a few thousand dollars so give me a raise or I will sell your house and put you in jail." There was a rough estimate that the price so far for the war on terror is over $600 billion. I wonder how much day care that would bring to the citizens of this country? It is high time we stopped the out flow of tax money to support other countries and spent it here on the hard working citizens of this country.
Peter Lawrence, USA

I could not agree more about adding a surcharge to luxury items like a 3 dollar coffee. Of course, it would be even better if the coffee growers would be paid fair prices by the companies. While people may complain about it, I do not think that people that can afford to spend 3 dollars on a cup of coffee would really notice it, how about the coffee company lowering their prices by 10 cents, and leaving the final price of the coffee intact... granted, the share holders would hate that - after all, charity is not appreciated by Wall Street
Kurt Musselmann, USA

Another 5 or 10 cents to go to a good cause is not going to hurt anyone James McKinley, USA

I think the tax is a good idea. The way this country consumes coffee and their derivatives, the money will be raised in no time. Once the initial funds are in place for the start of the day-care centres, then reduce the tax to more acceptable levels, say perhaps 5 cents. In any event, I think it's a good idea. Most of the people who are going to go in places to buy coffee are already paying too much, another 5 or 10 cents to go to a good cause is not going to hurt anyone. And if you think it's going to be that big of a deal to your wallet, then you are cheap.
James McKinley, USA

This tax is only on the high priced luxury coffees that people buy because they think it makes them look sophisticated. Raising the price would probably increase the popularity among this set. I say double the tax.
Jim, NJ, USA

I disagree with this purely on the basis that I already give money to charities that I want to give to. I don't then want to start having to give to charities (that I may or may not necessarily support) by paying more for everything else that I decide to spend money on.
Ben, England

I think it's about time the majority be taxed to provide the services needed to the community. For years smokers were the only people taxed heavily for their addictions, but it was OK because only 25% of the population smoke. No one balked because it didn't affect the majority. If you are going to levy a tax, it's only fair that it affect the majority...
Jennifer, USA

The more the government takes, the bigger it grows - and the hungrier it gets Phil Leith, USA

This illustrates the absurdity of a lot of tax laws. Who came to the conclusion that coffee drinkers should be singled out for paying for child care? Did any sort of logic go in to that? More likely coffee was seen as an easy target. "Who can we loot next with the least amount of resistance?" The fact of the matter is government has no business paying for child care. It should stick to defence, infrastructure and law-enforcement. Maybe that way we can keep a little more of the 42% of our income the insatiable government already gobbles up, and use it for child care for our own children. The more the government takes, the bigger it grows - and the hungrier it gets.
Phil Leith, USA

It's not that helping children is not a worthy cause or that a dime is meaningless. It's the principle and it is also only the beginning. Today coffee, tomorrow beer, wine, Nike shoes, plywood and etc. Governments need to live with in there means and with a budget just like their constituents are expected to. It's time to unite, toss the beans into the harbour and have a party. It worked a few years back in Boston, it can work again.
TK, MN, USA

As usual people thinking they pay too much tax already and complaining, here in the Netherlands we pay almost 40% tax, but our education, healthcare and transport systems work. And besides, we get paid based on the fact that we pay 40% tax, just as British people get paid based on paying 21%. It doesn't cost us anymore, only our employers, who charge that to their customers.
Jennifer, Netherlands, ex UK

Sin tax should not be levied against coffee additives, because coffee is not in the same category as beer and tobacco or cigarettes, which create health and traffic hazards. Hence, governments use the luxury taxation to cut consumption and minimize public- health safety repercussions. Coffee is a staple breakfast item; and, sometimes, an all-time meal necessity, which is also used in most offices and workplaces to invigorate workers. The proposed tax is unreasonable, discreditable and counter-productive.
Igonikon Jack, USA

Ten extra cents is not going to kill me if I'm splurging on a luxury like a frappucino anyway Shelley, USA

In the US, if you're buying coffee from Starbucks, you're already paying a good $2.50 for one cup of coffee. If you can afford that, you can afford an extra dime to help children get opportunities they wouldn't otherwise have. I love coffee too, but ten extra cents is not going to kill me if I'm splurging on a luxury like a frappucino anyway.
Shelley, USA

I would have no problem in tax rises that are uniform, non-discriminating, and do support the cause for which they were raised. It appears to me that UK smokers, drinkers, drivers etc are more than paying their way already - now coffee drinkers - this is absurd. How about a novel idea - raise extra taxes from MP's, local councillors and other political bodies - come on our elected officials, do some good in this world - fund it yourselves!
David Turner, Indonesia/UK

Some taxes are necessary, but others, such as this one, are simply ridiculous. This tax will go the same direction all charities go in someone's pocket. It will do nothing for the poor/homeless! What's next? Taxing a home owner for the number of leaves on the trees in his yard?
Isaac, California, US

I look at the issue from a different perspective. Coffee is the second most important export commodity for developing countries next to oil and US is the largest consumer of coffee. Imposing additional tax on coffee consumption in US would be a heavy blow to a number of developing countries whose export sector is totally dependent on that commodity. A typical example is Ethiopia where more than 60% of export earnings come from coffee. So, please don't tax coffee!
Solomon T., Ethiopia

Would taxing coffee result in Starbucks etc. giving it away for free, but charging for the froth?
ben, UK

There is absolutely no logic behind the idea Christy, England

This seems absolutely ridiculous to me. Where is the connection between coffee and day-care? Why should people only wanting a hot drink have to pay more for it, only to look after other people's children? There is absolutely no logic behind the idea.
Christy, England

The fact that it's going to a good cause is a red herring - the money the government was originally going to spend on the good cause is now freed up to spend on not so good causes.
Martin, England, UK

Sounds like a good idea. Just like the huge tobacco settlement that was supposed to go for programs to help people stop smoking. That is now being used for general gov't while anti smoking programs are slashed. Wouldn't take long for the same to happen to the coffee tax.
Kathleen, USA

Rather than put tax on coffee, local government should take pay cuts GM, Scotland

Rather than put tax on coffee (or other foods and non-alcoholic drinks), local government should take pay cuts to ensure they have the budget to provide better facilities to the community. Why is it that the community are the ones to keep making constant sacrifices when officials keep giving themselves constant rewards? I think officials such as councillors and department chiefs ought to look at the obscene salaries they get for doing nothing but waste resources and money. By the way, I am not a coffee drinker.
GM, Scotland

I'm a little confused about the way the proposal and the question are phrased. In the UK, food bought for consumption at home is VAT exempt. Therefore, I don't expect to pay more for my coffee for home consumption - irrespective of its type. However, if I buy a coffee in a shop, then I might be prepared to pay the levy. The reason, to me, is irrelevant.
Alan Hall, UK

Tax it as much as they like - this is a tea drinking country.
Alfred, UK

So Starbucks is concerned for the children of low-income families of Seattle, hum. Where is there concern for the low-income families of the countries they buy their coffee from? Fair trade, oh that would cut into there profits sorry I wasn't thinking. The tax hike makes them look good where it counts, their stores!
Tony Corteal, USA

Such programs should be funded from the general state income tax Chris, US

State sales tax is already levied on coffee in most states (although I'm not familiar with Washington's particular sales tax scheme). To single out coffee and add a specific tax - for day-care for the underprivileged - is arbitrary. Such programs should be funded from the general state income tax; raise it if necessary. Taxing coffee is a transparent attempt to squeeze more money from affluent, coffee-drinking yuppies, a demographic that won't howl too loudly when tax-bit. Still, with budgets strained across the US due to the huge outlay for homeland security, municipalities must be creative if they don't want to see budget shortfalls.
Chris, US

I grew up on a coffee farm back in Kenya. Picking coffee is hard work and involves a lot of processes. I totally agree that it should be taxed especially to help the struggling farmers in many developing countries.
Irene Mugure, UK

People who buy lattes and cappuccinos instead of plain drip coffee are suckers anyway, so it surprises me to hear them complain about and extra 10 cents. Having worked in a Starbucks, I can honestly say that the desire to drink frothy coffee is partly the desire for something less pedestrian than drip. You would think that "luxury tax" price hike would be welcomed.
Patrick Ford, USA

Coffee already is taxed. I believe there is a misguided idea that because people are willing to plonk down four bucks for a latte, they are all in an economic layer that has extra spending power, whereas some of us just like the occasional cup of froth with a kick and view it as a treat.
No one wants to see social programs in jeopardy but I am sorry, it's up to our politicians to come up with sensible solutions, cut fat, and dump their pet projects that cost money, with little benefit to the public.
The tax on frothy coffee obviously has been thought up by someone with more air in their head than an espresso machine.
D. Stewart, USA

The principal reason why England lost America was because of their stupid tax on tea, a lá Boston Tea Party. How to lose a country? Len Barrett, Australia

I was always taught that the principal reason why England lost America was because of their stupid tax on tea, a lá Boston Tea Party. How to lose a country? Tax them on their morning cuppa.
Just shows that depriving anyone of their "mornin' cuppa" can lead to a change in government.
Len Barrett, Australia

The scheme is a great idea in principal, but rather than make the consumer foot the whole bill, why don't coffee chains go 50/50 with the consumer? Or instead they could drop the price of their already expensive coffee and fund the scheme out of their own huge profits? Still, at least this time people can vote whether to pay the tax or not. I don't think they've forgotten what happened in Boston the last time a tax was levied on a hot beverage.
Kelly S, UK

This is just another way for governments to make sure that people in low income families continue to be low income. Where is the incentive for anyone to pull themselves up by their bootstraps if the governments are constantly inferring they aren't capable of helping themselves. We who make a decent wage are already overtaxed. This smacks of the socialist idea of redistribution of wealth.
Sandra Sharples, United States of America

I am completely in support of tax payments going to worthy causes such as childcare, but there is a little bit of me which thinks I'm already paying a huge amount in tax and national insurance for such essentials, and I pay VAT, so I'm not quite sure I should be paying more tax to support similar causes when I certainly couldn't afford to have any of my own kids yet? This just takes the pressure of the government to provide adequately for such needs.
Jenny, UK

A new coffee tax? Sure why not. If you can already afford the outrageous prices for specialty coffees, then an additional 10 cent tax certainly won't affect you. But for me, I'm going to stick with my tax-free 50 cent coffee from my local diner.
Ben, Canada

I think this is an idea with merit, and worth doing. It would be interesting to hear why Starbucks opposes this proposal. Surely it is clear that this proposal is in support of the community, and at a cost to the consumer that is almost negligible.
Jeffrey Scarr, Canada

Simon W:
You can believe this country prefers tea all you want. I moved here from Seattle five years ago and I can say that London has far more coffee shops than Seattle does (even when accounting for the difference in population). Why is that, if tea is the preferred 'proper hot drink'?
Susan, UK (ex USA)

Absolute nonsense!
Tax the companies making all the profits, not the consumers. They are the ones getting the raw materials for next to nothing and then charging us consumers £2.00 a cup.
Zafar, England

How about the government spends the 15,000 pounds a year it taxes me better? I suspect if it did they would be able give my kids a good education without going into debt and to buy me a cup of coffee every morning.
David, UK

Further taxing some items to raise funds for those in need is always a good idea. But why taxing coffee and not beer, or hamburgers, or wine, or clubbing, or tomatoes? If it were up to me I would put 50% tax on any car owned by anyone under-30 and not disabled.
Mustafa Yorumcu, UK/Turkey

I expect Gordon Brown wishes he had thought of a coffee tax Julian, England

I expect Gordon Brown wishes he had thought of a coffee tax. It sounds like one of his ideas. It would be provide another avenue for him to relieve the electorate of their hard earned cash, which he and the Labour Party could then waste.
Julian, England

The audacity of these people, why can't they wake up and smell the coffee! If people want to provide more for the poor people of South America they should bang on the doors of the WTO, whose recent meeting in Cancun recently collapsed. This is where trade tariffs..etc are negotiated.
The consumers do all they can to consume the stuff, but why tax them for the privilege as they do not make the decision to exploit the people who grow them - its the capitalist system.
Jay, England

And how many times are we told that if we pay a bit more it will go to a good cause - and it never does?
Sarah, UK

Isn't coffee from Starbucks etc. already taxed - VAT.
Dave Williams, UK

Ahh, crafty. You can't complain if its "for the children" or " for fighting terrorism". I'll believe it when I see the £30bn a year raised through petrol tax go to funding transport.
Paul Weaver, UK

My friends living in Seattle think it is absurd! As for the UK, we already pay 17.5% VAT!
Chris, UK

Instead of adding tax onto the coffee why don't manufacturers try to ensure all their products are fair trade? Or would that eat into their profits too much?
Rachel, UK

Another tax, now that is a surprise!!
Darren, UK

Theory is fine. Unfortunately, if Blair and co did this, money would briefly go to a good cause, but ultimately end up funding some white elephant like the dome, or fund our ever growing asylum budget. Have these Governments never thought of an increase in the rate of tax for high earners?
John C, Bath, UK

I don't see why money from coffee goes to childcare. It wouldn't work in this country anyway as we prefer a proper hot drink - tea!
Simon W, UK

I would support this if all (or a very high percentage) of the money was going to the people that need it.
Steven Hill, UK