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Sunday, September 20, 2009

The Soda Tax?

The talk appears to be heating up over imposing a soda tax.

AS CALLS mount for soda to be taxed because of its link to the nation’s obesity epidemic, Coca-Cola CEO Muhtar Kent tried this week to tar the tax as socialist, taking a page from the Republicans single-word playbook against health care reform, bailouts, and even President Obama’s back-to-school speeches.

Kent told the Rotary Club of Atlanta that proposals to tax sugary drinks and trash food were “outrageous’’ because “I’ve never seen it work where a government tells people what to eat and what to drink.’’ Kent added, “If it worked, the Soviet Union would still be around.’’

Kent is clearly worried because Obama, in the current issue of Men’s Health, said soda taxes should be explored. “There’s no doubt that our kids drink way too much soda,’’ Obama said. “And every study that’s been done about obesity shows that there is a high correlation between increased soda consumption and obesity.’’

The logic behind taxing soda is that it's bad for you. It leads to obesity and so an extra tax on soda would discourage drinking more soda. Now, I don't doubt that drinking soda would be bad for you. I don't even doubt that an extra tax would discourage drinking soda.

The problem with such a tax is there are all sorts of things that are bad for you. Unless the government is prepared to tax red meat, junk food, McDonald's and a whole host of other foods that are also bad for you, then the problem of obesity won't be solvedIn fact, it won't make anyone more healthy. It will just slow down people in drinking soda and more often than not, those people will find another activity that's bad for you. If we're really serious about solving obesity, maybe every television will have a transmittor and if you watch more than a certain number of hours, you'll be taxed as well. Sitting on your couch for too long contributes just as much to obesity as drinking too much soda. Maybe we can have a similar device for you computer, cell phone, and I Pod.

If the government is going to tax ever single thing that's bad for you, then you're looking at an awful lot of taxes. An extra cigarette tax was imposed to pay for SCHIP. That tax affects the poor and middle class overwhelmingly. First, they smoke more than wealthy. Second, wealthy can afford to pay more for cigarettes.

It's the same thing here. It will be the poor and middle that will be most affected by this tax. It's their budgets that will be most affected. A wise man once said that you can't legislate stupidity. If people insist on drinking on too much soda, that's their business. Trying to regulate that behavior with punitive taxes rarely works. Those that want to live an unhealthy lifestyle will live an unhealthy lifestyle. You can tax soda all you want but it will do little to solve the obesity problem. It will only hurt those that can little afford the extra tax now.


Anonymous said...

Does this mean no more free refills?

In any case, most taxes work because people can't make the product themselves. That most definitely does not work for soda.

Jason Gillman said...

Imagine if the government didn't have grand plans for controlling and budgeting our health care... then they wouldn't have to trifle with such things as a "soda Tax.."

Probably wouldn't be such a bad idea for this administration to start culling the herd for the Soylent green food process soon.. Who needs restaurants with different foods anyhow?

In fact.. who needs anything different? This is the road we travel with this intrusive bunch of narcissistic ninnies.

Anonymous said...

the idea of pigouvian taxes is to compensate for negative externalities. it's not clear this tax does that. greg mankiw, harvard economist (and republican) discusses this on his blog.

Anonymous said...

If the government really cares so much about the health of Americans, then instead of taxing cheap and "unhealthy" beverages (which will only hurt middle class & lower income families in the long run), they should make healthy food more affordable. It just doesn't make sense at all, but then again why am I not surprised at any of this.