Should We Tax Soda?
- Posted by: Andrew Price
- on May 12, 2009 at 4:44 pm
The Senate is considering various ways to pay for a health care system overhaul. One option is to start taxing things that are contributing to health problems such as obesity, and sodas are in the cross-hairs.
From The Wall Street Journal:
“The Center for Science in the Public Interest, a Washington-based watchdog group that pressures food companies to make healthier products, plans to propose a federal excise tax on soda, certain fruit drinks, energy drinks, sports drinks and ready-to-drink teas. It would not include most diet beverages. Excise taxes are levied on goods and manufacturers typically pass them on to consumers.”
The idea is that a new tax would discourage people from drinking so much soda, and thereby contribute to a healthier America, all while raising new revenue to improve health care. The Congressional Budget Office estimates that adding a $.03 tax to every can of soda would generate $24 billion over the next four years. It’s a relatively small amount, but it would help.
So why not? According to the Journal, “the lobby that represents Coca-Cola, PepsiCo, Kraft, and other companies said such a tax would unfairly hit lower-income Americans and wouldn’t deter consumption.”
The lobby is probably arguing that, because lower-income Americans drink more soda, they would therefore end up having to pay more, and so the tax is unfair. But that argument only works if they don’t have alternatives. In fact, people in every income bracket have access to tap water, which also happens to be both freer and healthier than soda.
Would you support a soda tax?
Photo from the Freakonomics blog.
DISCUSSION: 41 Comments
Part of me understands the idea behind taxing what’s not good for people in an effort to get them to stop consuming it, but another part of me can’t help but feel that it’s really terrible for the government to come in and intentionally try to hurt an existing business. I know Coke and the like aren’t exactly mom & pop shops or anything, but it’s still made up of people who are just trying to make an honest buck.
I don’t like soda, so yes.
Now I might be totally wrong about this, but it’s my understanding that a big part of the reason soda has become so ubiquitous is that corn subsidies have made sugars like HFCS artificially cheap. If that’s the case, the libertarian in me says remove the subsidies rather than add a new tax.
Yes! Tax things we want less of. We tax cigarettes on the same principle, namely that there are real costs associated with the health problems consuming them creates, and the people who are responsible for the problems—both the manufacturers but especially the consumers—should be the ones contributing to the solutions.
…but then you’d be hurting mom and pop farmer
@Anon from 5:29: That’s an interesting idea. Although that wouldn’t affect soda made with real sugar (which seems to be just as unhealthy as the HFCS stuff).
Also, while removing the corn subsidies would help ensure that soda was priced correctly as far as the HFCS input goes, the price of soda still wouldn’t reflect the negative health externalities. Although I realize that might be completely fine to the libertarian in you.
At any rate, thanks for the comment.
like philip morris but with carbonation and fructose.yes, tax them.i have battled a sugar addiction for years. since returning to complete my BA my financial situation has demanded that I cut non-essentials in order maintain a healthful diet. soda is a sugar and calorie laden extra, not nourishment. i don’t think it will hurt global corporations who someone said are trying to make an ‘honest buck’. if anything, this change will force those businesses to create alternatives. one of the joys of Capitalism – supply& demand = sink or swim.
the political and economic situation is such that change is going to be like having braces put on your teeth. kinda hurts but the results are often lovely.
Taxing one group over another on any criteria other than income doesn’t seem right to me.
We’re talking about 3 cents/can. If that hurts somebody’s wallet, they can afford to buy less soda. And for a company to sell enough of this kind of product that it becomes a problem, they can afford to have to charge more for it.
Let’s not pretend…three cents a can will only create revenue, it won’t deter anyone from drinking pop. That being said, it’s crap-stuff; any glance at the label will tell you that. I have mixed feelings about this idea, but reasonably speaking we can’t expect people to wake up to facts that have stared them down and probably smacked them around for years. We ought to raise taxes by 3 dollars a can. Seems shady, yes. Perfect it’s not, but it’s better than 140 lb.1st graders who need a break after walking down a flight of stairs.
The argument that “such a tax would unfairly hit lower-income Americans and wouldn’t deter consumption.” is unfair. The tax is for people who drink soda, if you want a soda pay 3 cents more. And if it is unfair to lower income individuals because they drink more they are also the ones recieving more benefits from the health care.. the wealthier can afford health care, 3cents is managable.
I drink soda and I am not fat. So, it’d be fairer to tax people for their extra weight then, so they’d have less money to buy food, an idea that I find absurd anyways.I see a lot of people with low income getting overweight exactly because they can’t afford to buy healthier food products and resort to buying highly processed food from places such as Walmart.People with higher incomes and better education are significantly less likely to become obese. The root of the problem is lack of education, lack of time and disposition to exercise, and lack of money to buy healthier foods. So, if a tax such as the proposed comes to being, the proceedings should be redirected to people in need so they buy a lean steak, a leafy salad, and more fruit.
Add lemon and lime and tap water is just as tasty, if not tastier.Yes, tax it. We have nothing to lose but type 2 diabetes.We also need to subsidize healthier foods. Essentially, anything in the fresh grocery section should get a subsidy and everything that’s in a cardboard box with preservatives somewhere else in the store should get a tax.
“I know Coke and the like aren’t exactly mom & pop shops or
anything, but it’s still made up of people who are just trying to make
an honest buck.”So it doesn’t matter if you make a product that ruins people’s lives so long as it’s profitable?
The obesity epidemic can be tied to the extra 200 more calories a day than people drank during the 1970 – the average can of soda runs at 200 calories. So it is a no brainer to put a tax towards all those gastric bypass surgeries that people are going to demand coverage for. I vote for a higher tax on high fructose corn syrup based beverges than those made with real sugar.
I am a diet coke fiend—and would hate to pay more—but yes–I would support a tax–the smokers have ahd to do that–I am not a smoker and never have been–but what is good for one is good for the other and if its good for the economy—heck yeah!!
It ain’t gonna make a hoot if sodas are taxed or not . The great Zerobama is gonna suck you dry one way or the other- so just bend over and smile!
tax everything.
TAX!TAX!TAX! That is all we ever hear anymore. How about stop electing these losers who cant figure out how to balance a budget. Stop wasting money on illegal aliens and just eliminate mexico by nuking them.
taxing soda because people drink it and if it is taxed they will drink less and become healthier…isn’t that the same idea they had with tabacco products? Didn’t work there either.
Tax the internet, proceeds to IMF.
I won’t argue that farm subsidies are aimed at big farm operations, but raising the price of corn would affect us in many ways. Even your t-bone would go up. Ethanol would be too costly to produce. Etc.Diet soda is worse than the high fructose corn syrup for your health. Why would that be exempt? My guess is too much complaining for the big corp’s. I don’t see how a 3 cent tax would affect Coke or Pepsi. They’ll just pass along the cost. The government hasn’t had to subsidize them yet.
I think that a new sin tax is overdue. Why only 3 cents?? If it gets passed that will only be the beginning. But a meager 3 cents could get it started. IMHO
Add the $.03 tax. If bottlers are worried about decreased sales, they’ll find ways to reduce cost $.03 a bottle. I think it would be prudent that in legislation, it should tax all bottled drinks except water, including diet drinks. No form of soda is healthy. Diet soda, while it doesn’t contain sugar, it is full of chemicals to replicate taste.Eat better. Live longer.
I’m not against a tax that would actually deter people from eating/drinking unhealthy foods, but $0.03 isn’t going to do anything but generate revenue for uncle sam. Sin taxes are the oldest trick in the gov’t’s book. There has got to be somebody out there with an innovative, creative way to fix the healthcare system.