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The Soda Tax Wars

Posted: 04/20/10 04:14 PM ET

This is the year of the soda tax.

Last year, the Coca-Cola Company, PepsiCo, and the American Beverage Association (ABA) spent an unprecedented $37.5 million lobbying Capitol Hill to quash a proposal in Congress to tax soft drinks as part of a plan to pay for health care reform.

Coke and Pepsi are formidable industry players, controlling well over 70 percent of the $43.3 billion industry. In addition to their titular colas, the two companies produce the vast majority of the most well known soft drinks, including Sprite, A&W, Fanta, PowerAde, Nestea, Mr. Pibb [Coke] and Sierra Mist, Mug, Slice, Gatorade, Lipton [Pepsi].

Big Soda called the proposed soda tax a "job killer," a "slippery slope" towards more taxes and more government regulation and would do "irreparable harm" to an industry that provides "220,000 good-paying jobs with health benefits." According to Kevin Keane, ABA's senior vice president for public affairs, "Once government reaches into your grocery cart, your business could be next."

Having lost in Congress, public health advocates are now taking the battle back to the states. More than ten states (including California, Washington, and New York), as well as the city of Philadelphia, are now considering a tax on soda. Policymakers hope to check rapidly increasing obesity rates among children and adults, which governments often end up paying for in higher medical insurance costs, and explore an untapped revenue source in a tight budgetary year. Researchers have found that beverages high in added sugars are a significant driver of increasing calorie intake and obesity.

Big Soda is, understandably, exceedingly unhappy about this attack on their carbonated profits. Their response includes the standard arsenal of big business opposition tactics and arguments.

Armies of deep-pocketed lobbyists are marshaling astroturf front groups to give their enterprise a respectable air. And then there are the blistering press releases, replete with easily digestible talking points. These generally fall into two categories. Some are philosophical: It's unfair to single out one industry for taxation. Or, obesity isn't the government's role, it's about personal responsibility and good parenting. Or, obesity is only a result of lack of physical exercise and watching too much television (perhaps viewing those Pepsi and Coke ads!)

And then there are the allegedly hard-nosed economic objections: Soda taxes will drive businesses away, kill jobs, discourage fresh capital from investing in areas that make soda sippers feel unwelcome, and trigger future excise taxes on food. Or they proclaim that the tax is regressive because poor people are big soda customers.


 
This is the year of the soda tax. Last year, the Coca-Cola Company, PepsiCo, and the American Beverage Association (ABA) spent an unprecedented $37.5 million lobbying Capitol Hill to quash a proposal...
This is the year of the soda tax. Last year, the Coca-Cola Company, PepsiCo, and the American Beverage Association (ABA) spent an unprecedented $37.5 million lobbying Capitol Hill to quash a proposal...
 
 
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HUFFPOST SUPER USER
Margery Kempe
Raised by wolves. Phd in
04:07 AM on 05/05/2010
I present a most horrifying NPR interview with American Beverage Association shill, Maureen Storey, and her jaw-dropping assertions about soda and health.
Dr. STOREY (Senior VP, Science Policy, ABA): Soda is comprised mostly of water. A full-calorie soft drink has 90 percent water and a diet soft drink is 99% water. Water is the most important nutrient that we have...
NORRIS: Let's move down, though, if you're looking at that label on the back of a soda, what else is in there that is of nutritional value?
STOREY: Of nutritional value, there is either high fructose corn syrup or sucrose and that does provide energy or carbohydrates. And if we are active and need a refreshing beverage after a nice long walk or a run, you can have a beverage and quench your thirst and stay hydrated.
NORRIS: Is it advisable after a nice long run or after going out and exercising...to reach for a beverage that has 34 grams of sugar? Is that nutritionally sound?
STOREY: Well, I don't think it's nutritionally unsound. There are studies that show that particularly with children, children who have been exercising may not drink enough water to get back to the hydration point that they need to be at. So with a little bit of flavoring and a little bit of sweetness, they will drink enough...

..by that logic, kids who don't get enough fresh air ought to start smoking as a way to encourage them to breathe more...
06:50 PM on 04/26/2010
Soda as with all food in New York is already taxed by the state at 4% and by the county between 3-5%. Then add in the fact that the state keeps 80% of the unredeemed bottle deposits. Now these politicians want to add another tax of 15%-25%. On a 20-oz dollar soda, 33 cents in taxes would go to government. Just see how it adds up...http://www.youtube.com/watch?v=tGvO7nW4EqA

They are targeting soda when it is NOT the only product with HFCS. I'm a big fan of the new cane sugar Pepsi and kosher Coke made with cane sugar. It would be taxed the same because it's a sugar-sweetened beverage. So this is more then just soda, sorry Frappuccino fans, but less then everything. So eat those cupcakes with untaxed delight.

Soft drinks have existed since the 1600's, but the obesity problems the last 3 decades. The culprit is lifestyle, so could one get a tax rebate for going to the gym. When Paterson originally proposed the soda tax, he also recommended a tax on gyms and trainers. These politicians are using the health crisis for more regressive taxation.

One talk about the failings of government to address obesity, like gym classes writing about volleyball because No Child Let Behind demands a number grade. We cannot have government legislating personal morality. The 18th Amendment teaches a lesson in the unintended consequence of the government telling the People what is "Sin".
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10:38 PM on 04/25/2010
In these parts we call soda or pop "tonic".
It comes from the days when you went to a drug store to buy these products.
The original Coca-Cola came in just a 6 oz. bottle because that's all anyone should really drink.
Then Pepsi (the name refers to curing stomach aliments) came along and offered twice as much for the same nickel as Coke.
The soda wars began and now we all are the casualties.
Along with taxing this stuff we should all refer to it as "tonic".
Then you just might think twice before you suck down a 32 oz. Big Gulp this summer.
10:19 PM on 04/23/2010
Perhaps instead of a sin tax on sodas, which does not work well to curb consumption, we should look at the root cause of all the cheap high fructose corn syrup usage- cheap govt. subsidized corn.
Let us end this subsidy and replace it with a Broccoli, carrots, turnip green subsidy. If good healthy staples are cheaper, we might actually consume more of them. Without cheap HFcorn syrup, the price of sodas would increase in a more "logical" manner.
It makes no sense to me to spend tax dollars to support this product and then tax it at the consumer level.
04:20 PM on 04/25/2010
Absolutely right. Ban the use of HFCS and remove subsidies for corn and replace them with subsidies for real foods that can then be sold more cheaply to the people least able to afford them now. The price of soda would go up naturally in this scenario, but the benefits would be in the availability of affordable real foods. Obviously no government would be interested in such a scenario.
10:31 AM on 04/27/2010
OBVIOUSLY.
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HUFFPOST SUPER USER
thinkingwomanmillstone
great, green, globs of greasy grimey GOPerspeak.
08:14 AM on 04/22/2010
I have no problem with the soda tax, per se. Soda is an unneccessary luxury item. I drink diet soda and know that it is not good for me. But, it will not cut down on soda consumption or obesity. If the tax is spent on health related services, I would be happy to pay the extra. The idea that people won't spend another dime or quarter for a soda is just stupid. Just go to a ballpark or amusement park where sodas are 4 or 5 dollars each. They still sell a ton of them. I am all for taxes that target non essential items.
12:09 PM on 04/21/2010
Some important facts about taxing soft drinks were misrepresented that I feel are critical to this discussion as a registered dietitian who helps people improve their diets and consults for food and beverage companies to better market their products.
First, there is no evidence that taxing soft drinks reduces obesity or changes consumption habits. Arkansas has been collecting soda taxes since 1992 yet has maintained its rank among the top10 states with the highest rates of obesity in the country. Results from a recent study by the RAND think tank and Univ. Illinois on the impact of existing soda taxes also found they do not reduce consumption or obesity.
Second, no valid association can be made between the dangers of tobacco products and the need to discourage their use through taxation and the casual consumption of soda. Soft drinks provide calories just like most other foods and beverages, and all of the calories we consume contribute to excess weight if they are not offset by enough physical activity. The nutritional value of a food or beverage does not cancel out the harm of excess calories, so we need to stop looking for a scapegoat to obesity in the grocery store.
Lastly, the biggest omission from this article is the need to hold state and federal officials responsible for balancing their budgets by spending less and operating more efficiently. The assumption that a soda tax will fix that is the greatest fallacy of all
03:29 PM on 04/21/2010
With a moniker like yours I am shocked that the issue of high fructose corn syrup is not mentioned as the health and diet killer that is has been proven to be. You cite to a RAND think tank as if that is somehow unbiased. Please. Which one of the beverage manufacturers do you work for?

Show me facts about the lack of correlation between cigarette taxes and reduced consumption of tobacco?

The biggest omission in your is that corporations need to be responsible to their consumers and not poison them with cheap ingredients that improve only profits.
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10:50 PM on 04/25/2010
Dietitians should be citing peer reviewed journals not political think tanks!

Sugary Tonic (soda) is the #1 contributor to Type II Diabetes.

If this lady is your dietitian run as fast as you can!

You probably need to burn the calories.
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10:41 PM on 04/25/2010
You lost me with RAND.
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Ozark Homesteader
http://ozarkhomesteader.wordpress.com
11:28 AM on 04/21/2010
As an Arkansan who rarely drinks soft drinks and never buys "juice drinks," I think taxes on soft drinks are an excellent idea.

The long-term solution to the soft drink industry's assault on American health and its lobbying efforts is probably outside drink taxes, however. First, we need to eliminate agricultural price supports that make the cost of high fructose corn syrup artificially low. Next, we need a Constitutional amendment to reduce corporations to their rightful place in politics, as made up of citizens who are entitled to their rights, not as citizens themselves.

http://ozarkhomesteader.wordpress.com/
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10:40 AM on 04/21/2010
The fundamental problem with any sin tax is that it depends on citizens taking part in the habits it allegedly tries to curb while giving government another bad habit of its own. What would happen to government on a state and federal level if all smokers did the right thing and quit today? Of course it would be an economic disaster. We depend, in part, on smokers to continue puffing away. We depend on some degree of alcohol dependency. A soda tax would be one more addiction on a growing list.
itolduso
lateral thinker
12:09 PM on 04/21/2010
exactly right.... in effect, government has 'partnered' with industry to profit from harmful, dangerous, and/or addictive products that regulators (with a wink & a nod) have allowed into the marketplace.
02:23 AM on 05/24/2010
however, we have seen that when a government bans such products marijuana, cocaine, heroin, their use does not stop. People are always going to have their vices and partake in them. Sin taxes should simply be for revenue's sake, because you are not changing the behavior.
JNarragansett
Check your premises
10:27 AM on 04/21/2010
What is the purpose of a tax on soda? If it is just a revenue grab, then the taxes should be so low as to have no effect on consumption and you should just drop any pretense of morality and admit it is just to feed the growth of government.

If however, it is aimed at changing behavior, then you cannot dispute the fact that this will be regressive in nature and will cost jobs. A larger percentage of income is spent on food the lower you are on the socio-economic ladder, so increases in the costs of food are disproportionately felt by the poor. If you want to change behavior, then you'll have to raise taxes sufficiently to change behavior, which means that you reduce consumption, which means jobs lost in production.

As to the good intentions for spending the money, any program that relies on a tax designed to decrease consumption of the product taxed will inevitably become an unfunded liability.
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SusanElizabeth1949
My micro-bio may be empty but my head isn't.
07:15 PM on 04/24/2010
I wouldn't call soft drinks 'food', they are empty calories. Carbonated water, high fructose corn syrup artificial flavoring and coloring.
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09:44 AM on 04/21/2010
I don't drink pop often, stay away from HFCS as a rule, and am on the fence about taxing it. I am absolutely for healthier humans, however, if they did tax it, I don't think it would detour people form buying it. Pop can be made without HFCS. I had a sip of a Dr. Pepper made with cane sugar and it was far better tasting than what I remember the regular stuff tasting like.

HFCS should just be banned across the board, that would help more with our nations health (or lack thereof) as it is in practically everything that is processed. I don't think people will suddenly become meccas of health as there is still lots of other garbage foods out there, but it would be a start.
07:16 AM on 04/21/2010
Overweight problems are not the fault of food manufacturers. People do not want to hear that but it is true. If parents would not buy the drinks, if kids had self control and choose water or something else a lot of this problem would not be there. To blame just the producers is unfair. I rarely drink soft drinks, but I do not think they should be taxed more than any other food. If sugar and fructose sugar are the so called culprits then go to the source so the taxation is balanced. Go to the root of the problem and not the end. Personal responsibility has to play a part somewhere. Kids need to ride bikes more instead of sitting on a couch and playing their X box all day.
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06:48 AM on 04/21/2010
WHAT I NEVER HEAR IN THEST STORIES:

What about non-caloric, DIET SODA???

The whole point is that "soda has high fructose corn syrup and leads to obesity, so it should be taxed at a higher rate." That's fine--makes sense. The problem is that MANY PEOPLE ONLY DRINK DIET SODA, which all the manufacturers make. Again, this is NEVER factored into any of these stories. So does diet soda get the high tax too even though the justification for the higher tax does not apply to it? Or do you have pop machines with different prices for diet and regular products? Please address this next time you give us an article on this.
07:09 AM on 04/21/2010
The whole point is that "soda has high fructose corn syrup and leads to obesity, so it should be taxed at a higher rate." That's fine--makes sense.

No it doesn't make sense! Only to a liberal. Why not tax everything that contains corn syrup? Why not tax everyting that contains sugar? The only thing the feds want from this is another revenue stream, that is all!
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07:18 AM on 04/21/2010
I love it when people append remarks to my posts that IN NO WAY EVEN ATTEMPT TO ADDRESS THE POINT I MADE.

Glad a word you saw caught your attention. Next time do your own original posting
02:31 AM on 04/21/2010
It doesn't make sense to have an excise tax on the consumption of corn sweetener when we also have a tax-funded subsidy for the production of corn. We already pay taxes to finance this ridiculous surplus of cheap corn processed into sweetener. That's why corn sweetener is too cheap!
01:24 AM on 04/21/2010
There's lots of sugar in soda:

http://www.bethecatalyst.org/hollyaprea/posts/220-How-much-sugar-is-in-your-pop-

I lost 20 pounds the year I stopped drinking this junk.
01:31 PM on 04/21/2010
Me too! Best thing I ever did aside from quitting smoking.
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LMPE
I connect the most dissimilar things
01:15 AM on 04/21/2010
I've never drunk that garbage in my entire life.
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06:50 AM on 04/21/2010
Could you possibly be more condescending?