Tax on Soft Drinks Could Relieve States’ Budget Woes

Rubens_Bacchussoda2A new report by a health advocacy group calculates a tax on soda and other sugary drinks could raise $10 billion a year, tapping into current fiscal anxiety in state and local governments.

The Center for Science in the Public Interest argues a tax of 7 cents per 12 ounces of soda (a typical can) would fill government coffers in the long-term as well, by lowering health care costs. Several studies have shown a correlation between drinking soda and obesity, a costly health epidemic.

In September, the influential New England Journal of Medicine published a report suggesting a national 1 cent per ounce tax, or 12 cents per can.

Thirty-three states already have small taxes on sugary drinks — these taxes amount to, on average, no more than 5 cents or so per 12 ounce can. Given the average cost of a can of soda is .75 to 1.00, the two proposals would levy a tax of around 10 to 16 percent per can.

Social Engineering? So What?

Opponents of any beverage tax, which not surprisingly include companies like PepsiCo. as well as trade groups like the American Beverage Association and the Center for Consumer Freedom, say taxing soda limits personal choice. From the Los Angeles Times:

“The tax code should not be used as a tool for social engineering. Nor should it be an instrument for penalizing individuals’ personal food choices — choices that some government officials find distasteful,” said J. Justin Wilson, senior research analyst at the Center for Consumer Freedom.

“Taxing soda pop is another paternalistic policy idea, which holds that politicians and government regulators, rather than individual citizens, should decide every aspect of what, where and when we eat.”

But is it really “social engineering” or just common sense? It is a fact that higher taxes on cigarettes, combined with increased awareness of the negative health consequences, has led to a dramatic drop in smoking (outside of Mad Men), with an associated reduction in smoking related illness and health care costs.

If that is social engineering, sign me up.

Government Balks

Despite President Obama’s casual endorsement of the idea, however, the influential Senate Finance Committee neglected to include a National Soda Tax in its health reform proposal last month.

Kelly Brownell, author of the New England Journal’s proposal, told USA Today it is more likely that soda taxes would be adopted first by states, then by the federal government.

“That’s what happened with tobacco. The states were on it long before there was federal action.”

More:

Op-Ed by Kelly Brownell and David Ludwig in the Los Angeles Times 10/06/09

BC (Ben) Upham is a freelance writer based in Los Angeles. He has written for the New York Times, and was a writer and editor for News Communications, Inc., a local paper consortium serving Manhattan. When he's not blogging on green issues -- and especially renewable energy -- he's hiking in the Angeles Mountains or hanging out at El Matador.