Senate Considers Federal Tax On Soda

Senate Tax The Senate Finance Committee today is hearing proposals on how to pay for President Obama's proposed universal health care plan which is expected to cost more than $1 trillion dollars.

by Associated Press

Published: Tue, May 12, 2009 - 3:44 pm CST Last Updated: Tue, May 12, 2009 - 3:46 pm CST

The Senate Finance Committee today is hearing proposals on how to pay for President Obama's proposed universal health care plan, which is expected to cost more than $1 trillion. Among the proposals, as Consumer Affairs reports: A three-cent tax on sodas as well as other sugary drinks, including energy and sports drinks like Gatorade. Diet sodas would be exempt.

"While many factors promote weight gain, soft drinks are the only food or beverage that has been shown to increase the risk of overweight and obesity, which, in turn, increase the risk of diabetes, stroke, and many other health problems," Michael Jacobson of the Center for Science in the Public Interest, which is pushing the idea, said in his testimony. "Soft drinks are nutritionally worthless…[and] are directly related to weight gain, partly because beverages are more conducive to weight gain than solid foods."

According to Jacobson, "Beverage companies market more than 14 billion gallons of calorie-laden soft drinks annually. That is equivalent to about 506 12-oz. servings per year, or 1.4 servings per day, for every man, woman, and child."

He argued that each penny of tax on a 12 ounce drink would raise $1.5 billion annually and lower consumption roughly one percent, improving overall health. The Congressional Budget Office estimates that a three-cent tax would generate $24 billion over the next four years.

Such a tax might well be considered a "sin tax" similar to the taxes levied on cigarettes, which are extremely high compared to most other consumer products. Jacobson also wants the taxes on alcohol raised -- he argues that doing so will "compensate society for the costs of alcohol abuse and alcoholism and to marginally reduce problem drinking." The argument echoes the idea of cigarette taxes helping pay for health care costs associated with smoking.

In his testimony, Jacobson also called for a ban on artificial trans fat and a reduction in sodium levels in food.

Any soda tax a proposal is unlikely to pass easily, as New York Governor David Paterson well knows. Paterson's proposed 18-percent tax on soft drinks died amid pressure from the industry and resistance among New Yorkers who didn't want to pay more for soda.

It would also, it should be noted, only pay for a tiny portion of the health care overhaul.

Susan Neely of the American Beverage Association, which represents Coca-Cola Co., PepsiCo Inc. and others, told the Wall Street Journal that the tax would hit poor Americans hardest and would not lower consumption.

"Taxes are not going to teach our children how to have a healthy lifestyle," she said. Neely said the industry backs programs to lower consumption of sugary drinks in schools.

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eee222 Says:

Fri, May 15, 2009 at 7:22 am

I just read where TARP funds are going to be used to bail out the life insurance industry. The way I see it I am now a proud owner of not only the auto industry, investment groups(wall street),housing industry, but now I have a piece of the rock also. Is this a great county or what? If they really want to make it easy just eliminate all companies and form one big one….the GOVERNMENT. It worked well in Russia didn’t it?

Wait4Me Says:

Fri, May 15, 2009 at 6:33 am

Southfan, You really don’t get it do you? Its not about the fact that sodas and certain juice drinks are bad for you (I agree most are) Its about the fact that OUR elected officials and OUR government want to tax us into poverty, they want to fund extravagant programs and their own little agenda items and yes I know ALL of them Bush, Barrack, Nancy, Hillary, Sessions, McConnell, and McCain ALL of them have their hands in the cookie jar. Once they tax all the items they deem “bad” for us and Americans quit using them then they will have to tax all the items that are good for you to fund their healthcare, stimulus bill, outrageous budget, and extremely unnecessary pork projects. Now when the sales of Colas drops off and their revenue is down because people quit drinking as much the companies aren’t going to suck up the expenses, nope they are going to lay off employees then those employees will be on BO’s free healthcare and that will place an even greater burden on the rest of the working Americans. A never ending cycle unless we can get our government to step up and be the first to admit they have to cut back and in a very large way.

southfan1981 Says:

Fri, May 15, 2009 at 12:10 am

They don’t call it a sin tax for nothing. What are all the mamma’s going to say when someone points out that the “Juice” they stick in sippy cups for little Jr. is nothing but fructose and water.

In the words of a wise gastrointerologist, An Apple A Day Keeps The Doctor Away.

rmseek1234 Says:

Thu, May 14, 2009 at 4:19 pm

I think they are going to tax the Kool-aide that the BO supporters drink,also. That might cause a riot.

BSB1958 Says:

Thu, May 14, 2009 at 4:04 pm

If we would deal with the illegal immigrant problem, the savings to our economy would make this silly issue look very small and any new taxes on the American consumer unnecessary.

Sirk Says:

Wed, May 13, 2009 at 10:06 am

It’s not about “how to pay for President Obama’s proposed universal health care plan”. It’s about taxing you to death so that you have nothing and cannot afford to buy anything. The president and congress do not care about your health. They are only concerned about lining their pockets.

We will eventually be just like Africa and other countries where the government will hand out what little food you receive. You do not see Africa’s government starving to death or dying because of lack of health care. You will wait in line for what you get.

I have seen old Western movies where if they want a horse to obey and try to train a horse, they do not give the horse water or food for several days or longer and let the horse get weak and then the horse will either die or its spirit will die and it will do anything man wants it to do.

The government is slowly doing the same thing to us and calling it “taxes” so that we will not recognize it.

SamRock Says:

Wed, May 13, 2009 at 9:53 am

Ickthus, I agree totally with you on that. But I do agree that if they’re gonna target something to tax, do it with something almost everyone uses instead of singleing out specific minority groups as we smokers have become.

bikertod Says:

Wed, May 13, 2009 at 9:10 am

I absolutely love it.I have been saying for years,that after they get done taxing the everloving Hell out of us smokers,somewhere,somehow,they will go after something you like eventually.And they aren’t done.It’s a disease,once they figure they can get away with it,they can’t stop.And you thought it was just us smokers going to have to pay.Welcome to taxation without representation “y’all”.

southfan1981 Says:

Tue, May 12, 2009 at 7:17 pm

Not all soft drinks are created equally. The so-called “sins” vary. I think this will be difficult to institute. How will our schools be taxed on the junk they give our kids? If they are identifying high carbohydrate and fatty foods as the culprit, shouldn’t the schools have to comply? When will parents file class action law suits blaming our State Board of Education for removing physical education from daily curriculum?

I would like to see drive throughs and fast food regulated or taxed by the packaging they wrap around the swill they sell. That garbage doesn’t just go away!

eee222 Says:

Tue, May 12, 2009 at 6:58 pm

Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.
Ronald Reagan

It’s not like we were not warned.

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