Extending food tax wrong way to go

  • Wednesday, April 8, 2015 4:43pm
  • News

Now, regarding the push by the borough mayor to extend the food tax to the entire calendar year …

There is a phenomena in economics called “The Costco Effect.” It’s real simple: Push our taxes up, and we simply drive up to the road to buy all of our goods at Costco. They’re cheaper to begin with, and there’s no sales tax and there’s a much better selection.  

It’s ECON 101 — supply and demand — we are not held captive by a lack of solutions to the dilemma of higher taxes. How stupid do they think we are? And in the end, our local communities suffer because tax dollars have slipped up the road, north to Anchorage.

It’s ignorant, Keynesian economics to think that raising taxes is elastic.  Wrong — this rubber band will stretch by buying in a different community.

Paul Hueper

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