January, 2010
Soda: America's New "Tea"
Jeff Ivey
I love soda. I hate taxes. So it only makes sense that a proposal by Democrat's in Washington to raise taxes on non-diet soda and other sugary drinks nationally would catch my interest. And draw my strong opposition.
The idea of taxing sodas is nothing new. Many states have imposed such a tax and two states that have done so are West Virginia and Arkansas. According to Forbes Magazine, West Virginia has the 6th highest rate of obesity and Arkansas has the 5th highest rate of obesity nationwide. Why is this the case? According to a 2008 study by Fletcher, Frisvold, and Tefft, soda accounts for only 7% of an average Americans yearly calorie intake- a very small percentage. Their study also found if a 75-cent soda increased in price to 90-cents due to a tax, a severely obese individual's BMI (Body Mass Index) would drop from 40 to 39.98. Not much change.
The economics of a soda tax do not add up either. Many experts and advocates see an excise tax on soda as a deterrent for its consumption and for the promotion of a healthier citizenry. If that is true, according to logic and rational thought, a tax levied on soda and other sugary drinks would decrease their consumption over time. When consumption of these products decreases, then the amount the government collects in tax revenues decreases over time congruently. The tax could increase over time, but it then punishes people even more. Proponents of the soda tax often try to claim that it's a sin tax, much like the excise taxes commonly levied on products like cigarettes and alcohol. These products have strongly addicting ingredients that make their consumption relatively stable despite the change in price. Sodas and sugary drinks lack that strong addicting factor, so it makes it an even more unreliable target for collecting steady revenue to pay for a healthcare program that will have a hefty price tag.
Although no time is a good time to raise taxes, an economic recession is the worst possible time to raise taxes. The most common consumers of soda and sugary drinks are poor and middle-class Americans, so the tax would hit these citizens the hardest if implemented. Is it fair to punish these hard-working Americans with a regressive tax at a time when increasing consumer spending should be encouraged, not deterred? And looking at the grand economic picture, according to Americans Against Food Taxes, the beverage industry provides 220,000 jobs and has a direct economic impact of $136.4 billion dollars. Why should we put ourselves in the position of stunting economic growth and hurt hard-working Americans in a robust consumer market? Now, more than ever, we shouldn't be in the business of shrinking our economy; we should be in the business of growing our economy.
A soda tax sends a clear message to the American people, albeit indirectly- that the government is in the business of deciding what is/isn't healthy and seeks to correct our behavior. America has thrived because of the wisdom of its people, not its government. The government does not deserve to discriminate against consumers and deter behavior of people such as myself who enjoy these products. It's not fair. It's not right.
With this in mind, obesity and poor health are important issues to tackle. Parents need to assume more responsibility with teaching their children proper life habits to live by. The government should continue its push to fight obesity by informing it's citizens-especially children in schools- about proper health, not by attempting to force ‘good behavior' on its citizens or by distorting free markets. And we, as individuals, need to assume personal responsibility for our own health. Moderation is the key to enjoying products such as soda, and ask yourself: who is better at deciding that for yourself- you or the government?