Pumpkin Spice-Flavored Taxes
October is chock-full of obscure holidays and commemorations. October 3rd is National Boyfriend Day. October 15th — the real personal tax filing deadline — is National Grouch Day. (Coincidence? We think not.) October 19th serves up National Seafood Bisque Day (which sounds a lot tastier than today, October 25th, National Greasy Food Day).
But none of those can compare to the big orange ball of fun waiting for us just around the corner. We're talking about tomorrow, October 26th: National Pumpkin Day. Believe it or not, pumpkins are more than just everyone's favorite gourd — they're responsible for generating millions of tax dollars for the government.
For starters, check out pumpkin sales. Americans are expected to spend $377 million on cucurbita pepos to carve into jack o'lanterns in 2019. That means the IRS and state tax departments will harvest millions in income taxes from the farmers who grow them, then millions more in sales taxes from the families who buy them. No wonder all those pumpkins are smiling!
Next up, pumpkin pie: in 2015, Costco alone sold 5.3 million of them at $5.99 each. For those of you who weren't math majors, that's $31.7 million worth of creamy goodness. The high fat content in the crust, along with the egg-based custard filling, make them ideal for freezing until Christmas. So pick up two or three, and consider the extra sales tax a small price to pay for the taste of nostalgia.
And next, there's canned pumpkin pie filling. A couple of years ago, a vicious rumor started making the rounds that the glop you whip into your pie is actually just butternut squash. But Libby's, the Nestle subsidiary that sells $130 million cans of pumpkin filling every year, reports that they're just using a different strain of pumpkin that makes a richer, sweeter puree than regular carving pumpkins. Governments collecting sales on the pies can sigh in relief that they're not abetting a scam.
But while we're on the topic of "Things That Aren't Really Pumpkin for $200, Alex," pies are just the warm up for the real action. Love it or hate it (and there's not a lot of in-between), it's pumpkin spice season. It started as a twee Starbucks gimmick. But today's Pumpkin Spice Industrial Complex has inched its creepy tentacles into everything from candles to kale chips, and donuts to dog treats. Head to your doctor to get a flu shot, and the nurse will probably ask if you want it pumpkin spice flavored.
Here's the thing. Pumpkin spice — a blend of cinnamon, nutmeg, ginger, cloves, and allspice — started out as something called "pumpkin pie spice" to amp up the sometimes-bland pies. But lazy Americans quickly dropped the "pie" part.
And ever since 2004, when Starbucks rolled out their flavored lattes nationwide, pumpkin spice has become a symbol for all things autumn. Americans will gobble $600 million worth of the stuff this fall, putting millions more in tax collectors' pockets.
Now, this whole discussion may sound like a silly exercise. (OK, it is.) But there's an important lesson lurking under the filling and the whipped cream. Every financial decision you make has at least some tax consequence, even if it's just a trip to the bakery aisle (or in my case, the South Main Street Starbucks). That's why it's so important to keep us involved before big financial choices, and avoid expensive tax mistakes!
Are you thinking about making a large purchase this fall? Let us help ensure you're making the best financial choices. Please give us a call at (831) 758-5966 and we’ll help you keep more of what you make!