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Richard Greene

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It's Not a Tax on Soda and Pizza, It's "Honest Accounting"

Posted: 03/09/10 10:54 AM ET

The recent news about an 18 percent tax on pizza and soda helping American adults lose 5 pounds a year is going to drive Republicans and Libertarians crazy, especially after the soda industry just knocked out a much smaller soda tax proposal in Washington.

But I have news for all the free market Republicans and Libertarians . . .

It is a tax if we don't add 18% and not a tax if we do!

What?

According to the study just reported in the Archives of Internal Medicine, obesity results in $147 Billion a year in health costs for America.

And soda manufacturers and pizza vendors (and we all love pizza) don't pay one penny of that.

In a true free market, the real costs of any goods and services are always included in the cost of the goods and services. Otherwise the market is out of balance. If the pro-rata share, for example, of a 20 ounce can of Coke is $.50 of that $147 Billion, then the free market demands that Coca Cola take care of that cost and add it to their product so that "the market" can then make an informed decision as to whether they want to buy the can of coke or a can of Perrier or Fiji water.

As it stands now, Coca-Cola is literally cheating by not adding that $.50 and Perrier and Fiji water are playing by the rules, as there are no external costs incurred from the drinking of water. The same, by the way, is true with fossil fuels and dirty energy dishonestly competing with clean energy like solar and wind.

It's pure free market and pure, honest capitalism or "honest accounting" to add all of the external costs that will, otherwise be "jammed down the throats" of the taxpayers. California State Senate Majority Leader, Dean Florez agrees with this framing and specifically referred to the term "honest accounting" in a recent interview on MSNBC to discuss his bill to add a penny to the cost of soda for every teaspoon of sugar. (There are, by the way, 17 teaspoons of sugar in a 20 ounce bottle of Coke.)

The opposite of a free market is what we have now and it can only really be called "Corporate Socialism." Because who does pay those costs? Who, under our current system of letting corporations get away with skirting their responsibility, does pay for the, say, $.50 per bottle of health care cost? Where does that $147 Billion come from, since it doesn't come from Coca Cola and the pizza companies?

It actually comes from the taxpayers in the form of added taxes that have to be assessed to pay for the additional local, state and federal health obligations created by Coca-Cola (and other soda manufacturers and pizza sellers) and their "dishonest accounting". It is, in reality, the taxpayers paying more for the actions of private corporations and, therefore, subsidizing and coddling the corporations, or "Corporate Socialism".

And it goes well beyond soda and pizza. Meat is an even bigger culprit. Dr. Mehmet Oz, America's brilliant doctor and host of "The Dr. Oz Show" told The Aspen Institute that the real cost of a pound of hamburger meat, when all of the "externalities", including the huge costs of obesity were factored in, was $90. $90 a pound. That would make a McDonald's Quarter Pounder cost at least $22.50, before the bun, lettuce, tomato and the profit!!

So here's the real truth:
Adding 18% to soda and pizza (and anything else that increases health or other external costs) is not a tax.

Not adding 18% or an appropriate additional sum to those products will, eventually, result in a tax and a continuation of the "Silent Taxation" of Americans with every below true market price purchase they are allowed to make in the "Corporate Socialism" society that we currently tolerate.

I know this is probably too nuanced and accurate for the single bottom line companies and their apologists on the right to handle, but it is the truth and the only way for America to return to a true free market, discourage unhealthy and polluting products, encourage healthy and clean products, reduce the unintended subsidies and "socialistic" payments to and on behalf of our corporations and actually reduce taxes!

Richard Greene is a former Air America national talk show host and has been talking about "True Cost Factoring", "Honest Accounting" and "Silent Taxation" since he ran for United States Congress in 1992. His talk show, "Hollywood CLOUT!" is still heard in Chicago on WCPT FM and in New York on WWRL 1600AM.