We'll drink to that: Federal soda tax is a good idea
byMay 13th 2009 9:30AM
Your soda habit may be getting more expensive.
The Wall Street Journal (subscription required) reports that "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 rationale behind the proposal is that the consumption of sugary beverages leads to weight problems which in turn lead to serious health problems. Taxing soda seems like a perfectly fair way to raise cash to pay for expensive changes in America's health care system. If it leads to a continued decrease in soda consumption, that's even better: Less soda and more water means better health and lower health care expenses.
A special tax on soda is just one of hundreds of proposals being considered to help raise cash to pay for rising health care costs, but it looks like one of the better ones. The only real argument against it (other than the standard "No New Taxes!") is that it would disproportionately target low-income Americans and have a greater impact on their wallets. Soda might be a fairly significant part of a poor person's budget, but soda doesn't earn wealthy people any more money. As Andy Warhol wrote, "A Coke is a Coke and no amount of money can get you a better Coke than the one the bum on the corner is drinking."
The beverage industry is already lobbying heavily against it, of course, so it probably won't get passed. But if you're going to increase taxes, this is the way to do it.