Advocates of the national health care overhaul scrambling to raise the taxes to pay for it have floated the idea of imposing federal excise taxes on soda, fruit juice, and similar drinks. The Center for Science in the Public Interest, a left-leaning advocacy group, wants to include energy drinks, sports drinks (e.g., Gatorade) and ready-to-drink teas as well.
But the tax would cover only a small fraction of any national health care bill. The Congressional Budget Office (CBO) estimates that imposing a tax of 3 cents per 12-ounce serving would raise $6 billion a year. One proposal would increase the price of a 20-ounce soft drink by 15 percent to 20 percent.
Such a tax would be regressive, hitting the poor harder than the rich. The tax may not seem like much to Washington policymakers, but it adds up, especially for hard-pressed families in these difficult economic times.
Advocates argue that sugar-sweetened drinks contribute to obesity, diabetes and heart disease. A tax on such drinks would reduce their consumption, thereby fighting obesity and improving health.
But do we really want government and politics making such decisions for everybody? Athletes consuming Gatorade after a workout don’t suffer from obesity problems. Others may cut back on other calories so they can consume the soda or juice they prefer.
And do we really want government coercively barging in on such private decisions in any event? If the government can adopt a soda tax because it’s good for us, how about mandatory workouts, morning vitamins, prohibitions on alcohol or caffeine, and required daily vegetables.
Soda-tax advocates also propose still higher taxes on alcohol, regulatory prohibitions on trans-fat in food, and mandatory reductions of sodium in packaged and restaurant food.
Should our private lives really be subject to public judgments like this from the San Francisco Chronicle recently?
- “But the fact of the matter is that no one needs to drink sugar-sweetened beverages. No one has a right to them, especially when there’s a low-cost, healthy alternative that quenches people’s thirst even better than soda. It’s called water.”
At least if the health concern remains consistent, we won’t hear “Let them eat cake.”
Today's TaxByte was written by IPI senior policy advisor, Peter Ferrara.