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A sin tax for soda?

Taxing sugary drinks might improve the nation's health, supporters say.

By MSN Money producer Nov 9, 2009 2:25PM

This guest post comes from Andrea at Fools and Sages.

Politicians are tossing around a few ideas to help pay for health care reform, and one of the possibilities is to create a sin tax on sugary beverages.


Supporters point to obesity rates and the success of such taxes (and strong public awareness campaigns) in reducing smoking rates. Detractors say that the government should stay out of the nanny business, and that it would be a regressive tax, unfairly impacting lower-income Americans.

I don't have a problem with the price of soda going up substantially. If soda has any redeeming nutritional value, I'm not aware of it. Soda is purely for fun -- high-fructose corn syruped, fizzy, yummy-tasting fun. Maybe a little caffeine on the side, but other than that, there is nothing in a bottle of sugar and bubbles that you’re ever going to find defended by a pediatrician.


Even the sugar-free stuff has come under fire because of fears of long-term effects of artificial sweeteners and insulin responses that apparently can't tell the difference between the real stuff and the fake stuff, causing chemical imbalances and perhaps even encouraging overeating.

There will be some impacts, however, and it's always important to try to figure out what those will be and to whose benefit.

A good starting place to think about this is to see who is against it, and fortunately there is a nice little Web site out there that is happy to tell you. It's called "Americans Against Food Taxes," and here’s what they have to say:

Americans Against Food Taxes is a coalition of concerned citizens -- responsible individuals, financially strapped families, small and large businesses in communities across the country -- opposed to the Government’s proposed tax hike on food and beverages, including soda, juice drinks, and flavored milks. The coalition has twin primary aims: 1) To promote a healthy economy and healthy lifestyles by educating Americans about smart solutions that rely upon science, economic realities and common sense; and 2) To prevent the enactment of this regressive and discriminatory tax that will not teach our children how to have a healthy lifestyle, and will have no meaningful impact on child behavior or public health, but will have a negative impact on American families struggling in this economy.

I’m not going to list the companies on the site that have supported this group, but you should go look if you'd like a chuckle. It's pretty much who you would expect -- any company or organization involved in the soda industry, grocers organizations, fast-food restaurants, and petroleum and recycling groups. There are other groups in there that I would be more interested in hearing about, like Latino and Hispanic organizations, but for the most part, the people who oppose this tax are the people who make money off of soda.

I can understand that to an extent -- if people start drinking significantly less soda, jobs will be lost. And in a double whammy, if taxes on sugary beverages actually led to enough of a decrease in consumption that people lost weight and got healthier and extended their lives AND they got laid off from the bottling factory, they’d have to be on public assistance for even longer.


Logically speaking, then, the best way to increase the percentage of a person's life that they are gainfully employed and decrease the amount of time that we have to pay for their fat butts via Social Security and Medicare is to fatten them up and kill them off.

I can also understand the concern around an increase in soda being a regressive tax, except that it's a twisted bit of reasoning. It absolutely would be regressive, if you consider that Donald Trump wouldn't give a flip if the price of his Pepsi goes up but a 50-cent increase in the cost of a 2-liter bottle for someone making minimum wage is statistically vastly more significant. And if soda was some kind of necessity of life or if it was absolutely unavoidable, I’d take issue with a tax like this . . . but it’s not.


Although there may be a few people who live in areas with dubious water supply, Americans in general enjoy extremely clean tap water, and a glass of the stuff costs next to nothing. If the point of raising the taxes is to decrease consumption, and if lower-income Americans were to decide to skip soda entirely and switch to water, they would actually improve their financial picture. Calling it a regressive tax without addressing the shift in demand that it would cause is underhanded.

So should there be a sin tax on soda? I don’t know that it should be called a "sin" tax, but if the money was going to be used to help pay for health care for our obese, chemically dependent nation, I’d be all over a "stupid substance you don’t need for any reason at all but makes you fat and eats the enamel off your teeth" tax.

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