Can a Soda Tax Save the Day?
President Obama recently told Men’s Health, “There's no doubt that our kids drink way too much soda.” But is he ready to charge parents for it? The answer may soon be yes. As debates over state and federal budgets continue to threaten public services, there is growing interest in taxing products that are unhealthy to boost tax revenue. Just as federal cigarette taxes went from $0.39 cents a pack to $1.01 in 2009, governments are looking to tax unhealthy items in a bid to make up shortfalls and positively affect the public’s health. The latest mention for trimming state deficits is soda.
The Benefits of a Soda Tax
The Center for Science in the Public Interest just published a new report, that found levying a 7-cent tax per 12-ounce of Coke or Mountain Dew could generate a total of more than $10 billion per year. Whether it’s done on the state or federal level, the windfall could help cover important programs like health coverage for Americans. Another 2009 CSPI report notes that the $147 billion dollars of medical costs spent on obesity, half of which is paid by Medicare and Medicaid, could decrease in response to the lower consumption of sodas due to the tax.
A statewide study called Bubbling Over: Soda Consumption and Its Link to Obesity in California, found that of the 24 percent of people who drank one or more sodas a day, 27 percent of them were more likely to be overweight or obese. A USDA report found that a 20 percent tax could result in a 13 percent reduction in total calorie intake from beverages in adults and 11 percent in children as exposed by this article.
Taking the Cut
While Robert Greenstein of the Center on Budget and Policy Priorities as well as Michael F. Jacobson of the Center for Science in the Public Interest recommended an excise tax on sugary drinks, lawmakers seem to be skittish of the possible public outrage that may result. But while New York’s Governor Patterson may have received a tough break from tax payers for proposing an 18 percent tax on non-diet sodas in 2009, people in Georgia, where a 4 percent tax has been levied, or the other 32 states that have some form of soda tax, have been largely silent.
The other risk, according to a recent Huffington Post article is its effects on consumers pockets during the economic downturn. Susan Neely, head of the American Beverage Association, called the new tax a "money grab, pure and simple," coming at a time when "New Yorkers continue to struggle through a tough economy with double-digit unemployment rates." But that may just be propaganda from the soda industry who’s top two performers, PepsiCo and Coke already 13 and 24 percent profit margins respectively, for selling beverages that largely contain artificial flavors, water and high fructose corn syrup.
The Political Fallout
Despite a clear advantage to public health and an economic positive for tax revenue and medical expenditure savings, why hasn’t a federal soda tax been levied? The answer may be a lack of public interest for or against it. Because of a lack of public involvement on this issue, the political landscape warrants mention of bigger issues such as unemployment and housing. For this reason, the soda tax will either be levied without public vote, or ignored. Either way, the negative affect on public health due to excessive soda consumption may very well continue.
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For a complete review, read the Health Policy Report, The Public Health and Economic Benefits of Taxing Sugar-Sweetened Beverages, by Kelly Brownell, professor and director of the Rudd Center for Food Policy and Obesity at Yale University, Thomas Frieden, the health commissioner for the city of New York, and others in the New England Journal of Medicine.
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