Return to Transcripts main page

CNN Live Today

Debate on Coffee Tax

Aired September 03, 2003 - 11:42   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: One (UNINTELLIGIBLE)

ANDERSON COOPER, CNN ANCHOR (voice-over): If you don't mind paying $2.50 for a latte would you mind shelling out an extra dime?

That's the question Seattle residents face. Some critics of the proposed tax wonder whether it's a sin tax or a luxury tax. If it's sin, why not focus on alcohol. If it's luxury, why not focus on real luxuries. With a tax on Cristal you might think a single P. Diddy Swann can take a class room of kids from pre-K to premed. Seattle doesn't drink of alcohol to make a tax viable. But coffee, it's the mecca of moccachino. Residents sip some 200,000 espressos a day. Still, taxing espresso, isn't that like taxing cheese stakes in Philly or promises in Washington. Seattle's chamber of commerce say education should be funded through the regular budget. The same budget the chamber lobbied to cut last month. Starbucks is part of the grande mocha lobbying effort against the tax. But defeating it may be a tall order. Polls show fans of the tax are in a clear majority. While for those who oppose it, the future looks black. No sugar.

(END VIDEOTAPE)

KAGAN: All right, let's stir this one up and hear from both sides. Don Burbank is executive director of the Economic Opportunity Institute and a syndicated columnist for "The Daily News Tribune" in Tacoma, Washington.

Tom Buckley represents the group that calls itself Joined to Oppose the Latte Tax. Excuse the spelling there, jolt. He's vice president of a coffee roasting company in Seattle.

Gentlemen, let's talk about the tax. And John, we're going to go ahead and start with you. Just to be clear, we're talking about espresso drinks, not just your regular brew coffee. Why tack on the 10 cents for the foo foo expensive drinks? Aren't they just outrageously expensive enough as it is?

JOHN BURBANK, ECONOMIC OPPORTUNITY INSTITUTE: Let's talk about, first of all, about the need. You know, today is the first day of school for kids in Seattle Public Schools. And so, you have a lot of kids really excited about kindergarten, but their teachers are not going to be too happy because probably about 50 percent of kids won't be ready or eager to learn when they step into those doors. And we have to do something about this. I mean, they're -- we get to our test scores that were reported by our paper. It showed that in some schools, only 15 percent of kids are meeting standards.

So this is a really important need. And we need to find local funding for our local kids. And that's what this tax is all about.

KAGAN: All right, we're going to bring Tom in on that. Tom, it's hard to be against kids. And when we're talking 10 cents for a cup of coffee?

TOM BUCKLEY, J.O.L.T., JOINED TO OPPOSE THE LATTE TAX: I couldn't agree with you more over the issue. The issue is extremely important. That's why it should be funded by the average -- the typical revenue streams, not from the food -- a disposable food item, something that's food.

KAGAN: Give us an idea. Like instead of coffee, like what would be taxed?

BUCKLEY: Well, there's a levy coming up next year that it can be attached to, that's related to education issues that's already there. Just needs to be funded heavier.

The -- focusing on coffee and saying it's going to -- the numbers that they're saying it's going to generate are not the actual numbers that they will. The numbers that are projected are way off. It's too hard to project $7 million that's going to come from espresso. It's not...

KAGAN: So you're saying they're not going to get that much money?

BUCKLEY: No, because it's too hard to define what an espresso shot is. Their statistics -- their numbers came from the Specialty Coffee Association, which is -- covers all coffee, which includes drip coffee.

KAGAN: OK. John, let's bring you back in here. Now we've come down to the point of what is espresso?

BURBANK: Well, this is an interesting...

KAGAN: If it looks like a duck, quacks like a duck? I mean...

BURBANK: Yes, well, if it gives you a jolt, like a duck, it works. And in fact, the initiative is quite specific about the determination of espresso. It's one half ounce of pulled espresso.

But let's get back to this idea of taxes. You know, we do specialty taxes in our city all the time. We have a specialty tax for Safego (ph) Field, Mariner Stadium. We have a specialty tax for Paul Allen Football Team.

BUCKLEY: (Unintelligible.)

BURBANK: And so...

BUCKLEY: issue at hand. What does coffee and education have to do with each other?

BURBANK: Well, I'll tell you what it has to do with. The thing is that Seattle loves its coffee and we love our kids. And here's a way to do both.

BUCKLEY: We can have our coffee. And we can feel good that when we get ourselves a latte with vanilla flavoring, which I discussed, we know that 10 cents is going to go early learning and care. And it means that for every dollar invested in our kids, in high quality pre kindergarten society, all of us, businesses, citizens, save about $7 in the future in terms of reduced crime, in terms of increased productivity of those kids when they grow up, and in terms of better achievement as students.

KAGAN: John, let's move on past the need for a moment here because I think everyone's agreeing that -- everyone's kind of pro- kid. No one's -- the debate is more where does the money come from?

I think one thing that's going to capture the imagination and the attention of a lot of people, because of course, we're broadcasting to a wider audience than just Seattle here, is the idea of Seattle going off of something that is so identified with, and that is coffee.

BUCKLEY: Right. You know, what kind of message is that sending as far as, you know -- (unintelligible) are trying to run a business. Just because we happen to be known for coffee, it's just like the example today. Should Philadelphia be charged for their cheesesteaks to (unintelligible) for some issue that's, you know, not related to a sandwich?

BURBANK: Well, wouldn't it be great if Seattle was known for its coffee and for robust funding of high quality pre-kindergarten? That's really what the issue is.

KAGAN: Tom, let me put you on the spot here. We are basically talking about a luxury item. I know people who are waking up in Seattle, if they heard me say this their strong coffee is a luxury and not a necessity, they might disagree with that.

BUCKLEY: Well...

KAGAN: But it is not a basic need of life. So why not tax them like this?

BUCKLEY: It's all the definition of what a luxury item is. For some people, a luxury item is a donut everyday. Just by putting the dollar amount, the difference between a drip coffee and an espresso, and the price difference and saying well that price difference is what makes it luxury.

Espresso is just a different form of drip coffee gone through a different machine. It's not a luxury for my 300 wholesale customers that are all basically mom and pop type businesses to be in business. KAGAN: You think it's going to hurt your business?

BUCKLEY: Oh, it's going to -- what people don't realize is they think of Seattle as just being big coffee chains. Most of our customers, plus the owner owns -- we have our own retail shops, this is going to be a very taxing, you know...

KAGAN: Literally.

BUCKLEY: ...mind the pun, to deal with.

There's a lot of people that are just getting by in our industry. Our industry is very competitive. There's a lot of, you know, a lot of single mothers, a lot of small family run companies that this is actually going to bother them.

KAGAN: Our time is short. The vote is September 16th, coming up here in a couple weeks. Does it look like it's going to pass?

BURBANK: Absolutely, because I think Seattle likes -- want to have 10 cents for kids. And my friend over here, you know the -- his company has had sales increases from $2 million to $3.5 million projected this year. So this is something that we can afford to do. And especially when we have kids. 2400 kids in our city are prevented from participating in Headstart because there's not the funding for them. These are kids in need. We can't afford to leave them out anymore. That's what this tax is all about. And that's what this initiative is all about.

KAGAN: And with that, we will let you gentlemen settle this over a cup of coffee. Thank you.

BUCKLEY: Thank you.

KAGAN: Thank you for both sides of the debate. We appreciate it. And I like a tall cappuccino with a lot of sugar. Thank you so much.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com







Aired September 3, 2003 - 11:42   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: One (UNINTELLIGIBLE)

ANDERSON COOPER, CNN ANCHOR (voice-over): If you don't mind paying $2.50 for a latte would you mind shelling out an extra dime?

That's the question Seattle residents face. Some critics of the proposed tax wonder whether it's a sin tax or a luxury tax. If it's sin, why not focus on alcohol. If it's luxury, why not focus on real luxuries. With a tax on Cristal you might think a single P. Diddy Swann can take a class room of kids from pre-K to premed. Seattle doesn't drink of alcohol to make a tax viable. But coffee, it's the mecca of moccachino. Residents sip some 200,000 espressos a day. Still, taxing espresso, isn't that like taxing cheese stakes in Philly or promises in Washington. Seattle's chamber of commerce say education should be funded through the regular budget. The same budget the chamber lobbied to cut last month. Starbucks is part of the grande mocha lobbying effort against the tax. But defeating it may be a tall order. Polls show fans of the tax are in a clear majority. While for those who oppose it, the future looks black. No sugar.

(END VIDEOTAPE)

KAGAN: All right, let's stir this one up and hear from both sides. Don Burbank is executive director of the Economic Opportunity Institute and a syndicated columnist for "The Daily News Tribune" in Tacoma, Washington.

Tom Buckley represents the group that calls itself Joined to Oppose the Latte Tax. Excuse the spelling there, jolt. He's vice president of a coffee roasting company in Seattle.

Gentlemen, let's talk about the tax. And John, we're going to go ahead and start with you. Just to be clear, we're talking about espresso drinks, not just your regular brew coffee. Why tack on the 10 cents for the foo foo expensive drinks? Aren't they just outrageously expensive enough as it is?

JOHN BURBANK, ECONOMIC OPPORTUNITY INSTITUTE: Let's talk about, first of all, about the need. You know, today is the first day of school for kids in Seattle Public Schools. And so, you have a lot of kids really excited about kindergarten, but their teachers are not going to be too happy because probably about 50 percent of kids won't be ready or eager to learn when they step into those doors. And we have to do something about this. I mean, they're -- we get to our test scores that were reported by our paper. It showed that in some schools, only 15 percent of kids are meeting standards.

So this is a really important need. And we need to find local funding for our local kids. And that's what this tax is all about.

KAGAN: All right, we're going to bring Tom in on that. Tom, it's hard to be against kids. And when we're talking 10 cents for a cup of coffee?

TOM BUCKLEY, J.O.L.T., JOINED TO OPPOSE THE LATTE TAX: I couldn't agree with you more over the issue. The issue is extremely important. That's why it should be funded by the average -- the typical revenue streams, not from the food -- a disposable food item, something that's food.

KAGAN: Give us an idea. Like instead of coffee, like what would be taxed?

BUCKLEY: Well, there's a levy coming up next year that it can be attached to, that's related to education issues that's already there. Just needs to be funded heavier.

The -- focusing on coffee and saying it's going to -- the numbers that they're saying it's going to generate are not the actual numbers that they will. The numbers that are projected are way off. It's too hard to project $7 million that's going to come from espresso. It's not...

KAGAN: So you're saying they're not going to get that much money?

BUCKLEY: No, because it's too hard to define what an espresso shot is. Their statistics -- their numbers came from the Specialty Coffee Association, which is -- covers all coffee, which includes drip coffee.

KAGAN: OK. John, let's bring you back in here. Now we've come down to the point of what is espresso?

BURBANK: Well, this is an interesting...

KAGAN: If it looks like a duck, quacks like a duck? I mean...

BURBANK: Yes, well, if it gives you a jolt, like a duck, it works. And in fact, the initiative is quite specific about the determination of espresso. It's one half ounce of pulled espresso.

But let's get back to this idea of taxes. You know, we do specialty taxes in our city all the time. We have a specialty tax for Safego (ph) Field, Mariner Stadium. We have a specialty tax for Paul Allen Football Team.

BUCKLEY: (Unintelligible.)

BURBANK: And so...

BUCKLEY: issue at hand. What does coffee and education have to do with each other?

BURBANK: Well, I'll tell you what it has to do with. The thing is that Seattle loves its coffee and we love our kids. And here's a way to do both.

BUCKLEY: We can have our coffee. And we can feel good that when we get ourselves a latte with vanilla flavoring, which I discussed, we know that 10 cents is going to go early learning and care. And it means that for every dollar invested in our kids, in high quality pre kindergarten society, all of us, businesses, citizens, save about $7 in the future in terms of reduced crime, in terms of increased productivity of those kids when they grow up, and in terms of better achievement as students.

KAGAN: John, let's move on past the need for a moment here because I think everyone's agreeing that -- everyone's kind of pro- kid. No one's -- the debate is more where does the money come from?

I think one thing that's going to capture the imagination and the attention of a lot of people, because of course, we're broadcasting to a wider audience than just Seattle here, is the idea of Seattle going off of something that is so identified with, and that is coffee.

BUCKLEY: Right. You know, what kind of message is that sending as far as, you know -- (unintelligible) are trying to run a business. Just because we happen to be known for coffee, it's just like the example today. Should Philadelphia be charged for their cheesesteaks to (unintelligible) for some issue that's, you know, not related to a sandwich?

BURBANK: Well, wouldn't it be great if Seattle was known for its coffee and for robust funding of high quality pre-kindergarten? That's really what the issue is.

KAGAN: Tom, let me put you on the spot here. We are basically talking about a luxury item. I know people who are waking up in Seattle, if they heard me say this their strong coffee is a luxury and not a necessity, they might disagree with that.

BUCKLEY: Well...

KAGAN: But it is not a basic need of life. So why not tax them like this?

BUCKLEY: It's all the definition of what a luxury item is. For some people, a luxury item is a donut everyday. Just by putting the dollar amount, the difference between a drip coffee and an espresso, and the price difference and saying well that price difference is what makes it luxury.

Espresso is just a different form of drip coffee gone through a different machine. It's not a luxury for my 300 wholesale customers that are all basically mom and pop type businesses to be in business. KAGAN: You think it's going to hurt your business?

BUCKLEY: Oh, it's going to -- what people don't realize is they think of Seattle as just being big coffee chains. Most of our customers, plus the owner owns -- we have our own retail shops, this is going to be a very taxing, you know...

KAGAN: Literally.

BUCKLEY: ...mind the pun, to deal with.

There's a lot of people that are just getting by in our industry. Our industry is very competitive. There's a lot of, you know, a lot of single mothers, a lot of small family run companies that this is actually going to bother them.

KAGAN: Our time is short. The vote is September 16th, coming up here in a couple weeks. Does it look like it's going to pass?

BURBANK: Absolutely, because I think Seattle likes -- want to have 10 cents for kids. And my friend over here, you know the -- his company has had sales increases from $2 million to $3.5 million projected this year. So this is something that we can afford to do. And especially when we have kids. 2400 kids in our city are prevented from participating in Headstart because there's not the funding for them. These are kids in need. We can't afford to leave them out anymore. That's what this tax is all about. And that's what this initiative is all about.

KAGAN: And with that, we will let you gentlemen settle this over a cup of coffee. Thank you.

BUCKLEY: Thank you.

KAGAN: Thank you for both sides of the debate. We appreciate it. And I like a tall cappuccino with a lot of sugar. Thank you so much.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com