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Soda Tax

A tax or surcharge on soft drinks.

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A tax that makes sense and one that I can live with.

  • May 23, 2010
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In these days of record budget deficits cash-strapped governments at all levels are looking for creative ways to raise additional revenue.  Despite what government officials say one look at the numbers tells me there is little doubt that most of us will be facing substantial tax increases in one form or another in the coming year.  One proposal being seriously considered by both the federal government and a number of states is the so-called "soda tax".  In a perfect world we should not be raising taxes at all but if we must then it seems to me that a "soda tax" is one idea that we should carefully consider. 

The Senate Finance Committee is currently considering proposals on how to pay for President Obama's Universal Health Care plan.  Among the proposals, as Consumer Affairs reports: A three-cent tax on sodas as well as other sugary drinks, including energy and sports drinks like Gatorade and iced teas.  When you stop to consider the numbers, the amount of soda sold in this country annually is positively staggering.  According to Michael Jacobson of the Center for Science in the Public Interest "Beverage companies market more than 14 billion gallons of calorie-laden soft drinks annually. That is equivalent to about 506 12-oz. servings per year, or 1.4 servings per day, for every man, woman, and child."   Now I cannot vouch for the accuracy of Mr. Jacobson's statistics but in our gut we all know that soft drinks are one of the major contributors to both childhood obesity and the alarming rise of diabetes that we face in this country.  Jacobson goes on to argue that each penny of tax on a 12 ounce drink would raise $1.5 billion annually and lower consumption roughly one percent, improving overall health. The Congressional Budget Office estimates that a three-cent tax would generate $24 billion over the next four years.  That is a lot of money and when one considers the various alternatives, a relatively painless way to raise revenue.

Now as you might expect trade groups like the American Beverage Association vehemently oppose this idea.  But in the past the soft drink industry has been part of the problem.  Many municipalities accepted annual lump-sum payments from bottling companies in exchange for exclusive rights to peddle their products in that city or town's public schools.  This was very bad public policy.  And so now it seems like sentiment is building to impose a tax on sodas.  And it is not just the federal government30 states already have some form of tax on soft drinks and several more have proposals on the table.  Meanwhile even cities and towns are looking at a "soda tax" as a way to help to alleviate their fiscal woes.  On balance, I have to come down on the side of those who think that taxing soft drinks is a good idea.   Reluctantly recommended.

A tax that makes sense and one that I can live with. A tax that makes sense and one that I can live with. A tax that makes sense and one that I can live with. A tax that makes sense and one that I can live with.

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August 29, 2010
I think the tax should be more than 3-cents. It should be at least 10-cents. In the long run, the tax would benefit consumers more than it would benefit the government. It would be an even better if a portion of the funds generated by the tax could go toward programs to educating others on better nutrition practices.
June 18, 2010
A three cent tax sounds like a good investment to make if it helps ensure universal health care. There should be a tax on McDonald's and other fast food places as well. They not only undermine our health but generate a tremendous amount of waste with their packaging. And yes I both drink soda and eat at fast food places.
August 29, 2010
I agree with you 100% about the fast food tax.
June 07, 2010
Pop tax might help, and at least it would be Constitutional. I say, and the idea is gaining support, legalize and tax marijuana. It would save a lot of money; bring in a lot of money, and save our forests out here in California. If folks are planting in their backyards, they won't be planting in the forests — and there would be no more need of the drug cartels. Just as alcohol has no more bootleggers ... at least not many!
May 25, 2010
I try to call each issue as I see it.  If the figures I quoted in my review are anywhere near accurate then this tax would amount to just a few cents per drink and raise a staggering amount of money. I am well aware of the slippery slope here but I think it is an idea well worth debating as we are here on Lunch right now. Thanks for your input!
May 25, 2010
Paul this was well written and I gave you high marks. However, I'm surprised by your position on this. This is another US industry that could be harmed by government intervention. Taxes on these drinks would cut their sales and just add more grief to a staggering US economy. True that sugary drinks are not the best for people's health but shouldn't individuals have the freedom to drink what they want?
May 25, 2010
This is very interesting, Paul. I'm with @andrewjt on this one. Though I'm not a fan of soda and this wouldn't pertain to me, I don't like the idea of the government dictating my lifestyle. First a tax on a seemingly benign item like soda (I mean, I know it's not healthy, but at the same time, it's not crack cocaine or anything like that), then what next? A butter tax?  A cupcake tax?  I guess I'm still pretty divided about this. I'm interested to see what becomes of it. Thanks for sharing!
May 25, 2010
This is not something I am wildly enthusiastic about but with the epidemic of diabetes and obesity I would certainly be willing to give it serious consideration. Thanks for your input. Perhaps others can contribute their perspectives on tihs issue,
May 25, 2010
I hadn't heard of this, but it sounds like smart policy on a number of levels. Thanks for bringing it to our attention!
About the reviewer
Paul Tognetti ()
Ranked #2
I guess I would qualify as a frustrated writer. My work requires very little writing and so since 1999 I have been writing reviews on non-fiction books and anthology CD's on amazon.com. I never could … more
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A soda tax or soft drink tax is a tax or surcharge on soft drinks. It may focus on sugar-sweetened beverages (soda sweetened with sugar, corn syrup, or other caloric sweeteners and other carbonated and uncarbonated drinks, and sports and energy drinks). As an example of Pigovian taxation, it may aim to discourage unhealthy diets and offset the economic costs of obesity.

In America, obesity has been a growing problem and seems to have reached epidemic proportions in the last few years. Soda consumption has been noted as a contributing factor to the obesity epidemic and medical costs related to obesity are about $147 billion a year. In 1994 the soda tax idea was introduced by Kelly D. Brownell, PhD, Director of the Rudd Center for Food Policy and Obesity at Yale. Today, there are 33 states that have a sales tax on soft drinks.

To counter the problem of childrens' easy access to soft drinks, in 2005, the American Beverage Association began working to remove soft drink machines from US primary schools (grades 1 to 8), and to replace soft drinks with healthier beverages such as orange juice and milk. High schools would have a 50/50 percent balance of machines dispensing soft drinks and healthier alternatives.

In 2009, the American Heart Association reported that the soft drinks and sugar sweetened beverages are the number one contributor of added sugars in Americans’ diets. Added sugars are sugars and syrups added to foods during processing or preparation and sugars and ...
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