A Tax by Any Other Name
Five thousand years ago in ancient Egypt, before “money” was even invented, the Pharaoh’s goons collected a 20% tax on grain harvests. Three thousand years later, Julius Caesar implemented the world’s first sales tax. A generation after that, Caesar’s great-nephew Augustus implemented the first direct income tax. (Can you imagine filling out Form MXL in Roman numerals?) Since then, clever officials have created all sorts of taxes: property taxes, estate taxes, payroll taxes, value-added taxes, excise taxes, sin taxes, carbon taxes, and the like. You would think that with all those available ways to squeeze money out of citizens, our national debt might be less than $35 trillion.
The average American family pays about 30% of its income in federal, state, and local taxes. And we pay all sorts of unofficial “taxes,” too. Women pay a “pink tax” in the form of discriminatory pricing that inflates the cost of goods marketed to women: clothing, personal care products, and the like. Black Americans might pay a “black tax” in the form of support to less financially secure family members. But fall is in the air, and now it’s time for basic white girls across the country to pay a surprisingly high pumpkin spice tax.
It may be hard to believe, but Starbucks rolled out the first pumpkin spice latte test way back on October 10, 2003. That means the PSL will be old enough to vote in this year’s presidential election (although it’s probably not any more excited about it than the rest of us). Since then, pumpkin spice has conquered the world. Today, you can buy pumpkin spice Oreos, pumpkin spice Pringles, pumpkin spice meatballs, pumpkin spice toothpaste, pumpkin spice beard oil, and pumpkin spice soap on a rope. Rapper Cardi B sells something called “whip shots vodka infused pumpkin spice whipped cream,” which sounds like something designed to mask the taste of kale.
The real irony here is that most pumpkin spice products don’t include any real pumpkin. They’re just the spices that go into making pumpkin pie: a blend of ground cinnamon, nutmeg, ginger, cloves, and allspice. So, pumpkin spice products are delicious but phony, like everything else most of us eat.
Where does the tax come in? Well, two years ago, MagnifyMoney.com studied prices for 80 grocery and coffee products from six retailers. They found the largest markup at Trader Joe’s, which charged 161.1% more for their Pumpkin Spice Teeny Tiny Pretzels than their regular Honey What Pretzel Sticks. Starbucks charged 18.3% extra for their signature PSL. The average retailer charged a 14.1% pumpkin spice tax. Good news for Target fans, though – “Tarzhay” actually charges 3.4% less for their pumpkin spice products. Maybe they’re worried about clearing out space for Christmas displays that go up a week before Columbus Day?
There’s good news for those of you who think pumpkin spice is overrated, oversold, rolled out too early, or just plain disgusting. The same study found that internet searches for “pumpkin spice latte” have dropped 29% since 2018. Searches were highest out west, in Colorado, Arizona, Washington, Nevada, and New Mexico. They were lowest in Mississippi, Vermont, Louisiana, Maine, and Rhode Island. It’s easy to understand why searches were low in New England, where the turning leaves offer their own natural blaze of cozy fall glory. But why would they also be low in deep south redoubts like Mississippi? This is exactly the sort of question that “social science” was invented to ask, and we’re looking forward to the answer.
This fall, we’ll be busy working with clients looking to pay less tax of the official kind in 2024. Make sure you don’t miss any of those opportunities