Move over beer and cigarettes. Sugary soft drinks could soon be the latest national indulgence to be hit with higher taxes. "I actually think it's an idea that we should be exploring," said President Barack Obama in a recent interview with Men's Health magazine.
Taxing sodas could become the latest way to try to curb the rising tide of youth obesity and raise money for proposed healthcare reforms. In Texas, more than a third of ninth- to 12th graders – and 66% of Texas adults – are considered obese or overweight, Centers for Disease Control and Prevention statistics show.
"There's no doubt that our kids drink way too much soda," Obama said. "And every study that's been done about obesity shows that there is as high a correlation between increased soda consumption and obesity as just about anything else. Obviously it's not the only factor, but it is a major factor."
Despite Obama's remarks, the White House insisted that the president isn't asking Congress to raise taxes.
Texas lawmakers have tried to address the concern of youth obesity by proposing measures to keep kids more active in physical education classes, and preventing restaurants from using trans fats in cooking. Some efforts succeeded, others didn't. Yet, analysts say a tax on sugary drinks could work, potentially generating as much as $160bn over 10 years and dropping consumption of the drinks as much as 15%.
Support for taxes
A Kaiser Family Foundation poll this summer showed more than half of people asked would support taxes on sodas and sugary soft drinks to fund healthcare reform, but New Yorkers didn't react as well this year to such a tax, objecting so much that their officials dropped the idea. And Maine officials repealed a snack tax that had been in place for a decade.
Obama admits a tax on sugary drinks might be tough to sell: "Obviously, there's resistance on Capitol Hill to those kinds of sin taxes," he said. "Legislators from certain states that produce sugar or corn syrup are sensitive to anything that might reduce demand for those products. And look, people's attitude is that they don't necessarily want Big Brother telling them what to eat or drink, and I understand that.
"It is true, though, that if you wanted to make a big impact on people's health in this country, reducing things like soda consumption would be helpful."
So-called 'sin taxes' are generally put on items that could cause harm to people, such as alcohol or tobacco, and are geared to increase tax revenue and cause a slowdown in consumption. That's why some say sodas should be taxed, especially as more than 16% of Americans aged 2-19 are obese and could face growing health problems such as heart disease, diabetes, high blood pressure and gout, medical journals show.
"Childhood obesity poses a serious threat to health in the US," according to a report written by the Institute of Medicine and National Research Council. "The prevalence of obesity is so high that it may reduce the life expectancy of today's generation of children and diminish the overall quality of their lives."
The Senate Finance Committee this year talked about considering raising taxes on beer, wine and hard liquor to help with the health care funding.
Some critics contend that a soda tax is regressive and would hurt lower-income families more than others. They say some of the possible tax revenue should be used to add funds for more healthy food – vegetables and fruits – to the federal food stamp programme.
Opponents also say the tax could drop beverage sales by about $10bn a year, which could end up costing about 60,000 jobs in the industry, and could drop the tax dollars that local, state and federal governments collect, according to Americans Against Food Taxes, a group created this year to fight new taxes on food or drinks. Even if such a tax doesn't cost people their jobs, it will still have an economic impact on some families.
"A tax on juice drinks and soda would further squeeze hard-working families already struggling to pay their bills and keep their health coverage," said Susan Neely, president of the American Beverage Association. "With the economic downturn, there couldn't be a worse time to ask them to pay more for the simple pleasures they enjoy. We all want to improve healthcare, but taxes don't make anyone healthy."
Source: Fort Worth Star-Telegram
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