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Last Updated: Tuesday, 19 August, 2003, 11:22 GMT 12:22 UK
Seattle in a froth over latte tax
Seattle Starbuck's
Seattle: The home of the $5 mocchachino
Seattle's voters are being asked to choose between their children - and their coffee.

Among the most controversial proposals in 16 September's local elections is a plan to slap a 10-cent tax on lattes, white chocolate mochas, caramel macchiatos and the other premium coffees the Pacific city is famous for.

The proposal, known as Initiative 77, aims to raise millions of dollars to pay for daycare for low-income children.

But Initiative 77 has run into opposition not just from disgruntled consumers, but from the city's powerful restaurant lobby.

Latte fuss about nothing

Proponents of Initiative 77 say the logic of their case is overwhelming.

Initiative 77 poster
Initiative 77 is a small price to pay, its backers say
Those willing to spend up to $5 on premium coffees are among the richest in society, they argue, and will scarcely notice a 10-cent surcharge.

They point out that the latte tax - as Initiative 77 is now universally known - is equitable, since opponents are not forced to buy coffee.

"Drip" coffee, passed through a filter rather than based on Seattle's beloved espresso, is exempt.

According to fans of the latte tax, it will raise an annual $7m, which will be distributed to daycare providers with 10% or more children from low-income families.

They aim to supplement the salaries of daycare workers, which are often not far above the minimum wage.

They also claim wide public support, having collected the 30,000 signatures needed to put the initiative to the vote.

All steamed up

Opinion among consumers is mixed, with few reckoned likely to change their coffee habits so lightly.

But the business community is strongly opposed: a coalition known as Joined to Oppose the Latte Tax (Jolt), including the local chamber of commerce and coffee giant Starbucks, has raised $70,000 to contest the initiative.

Coffee has been singled out arbitrarily, they argue; the lack of connection between the source and the beneficiary of the tax revenues flies in the face of fiscal logic.

Cafe owners grumble that the extra record-keeping will impose an unwelcome bureaucratic burden, and say they already face overwhelming state and federal taxation.

And the forecast of $7m in latte tax revenue is far too optimistic, they say: at best, the initiative will raise an annual $1.5m

Coffee is big business in Seattle: according to some estimates, the city consumes more than 200,000 shots of espresso every day.

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