What’s Wrong with Taxing Soft Drinks?

Oregonians voted down a new tax on tobacco in 2007, realizing that it would unfairly hurt the poor. So why would one state legislator now propose a tax on sugar-sweetened soft drinks?

Representative Mitch Greenlick seems to think that making soft drinks more expensive will cut down on childhood obesity, even though some studies come to different conclusions. He knows that a number of other states tax the stuff, so why not get some revenue for the thirsty state coffers and help kids at the same time?

Well, it turns out that there are plenty of reasons to resist the urge to do good through such a tax scheme. The first is the moral argument against government meddling in our lives and life choices this way in the first place.

Then there’s the case that the tax would hurt all consumers, especially the poor. New York abandoned such a proposal in 2009 after what the governor referred to as the “sugary beverage tax” came to be called “the fat tax.” Even the director of government relations for the Food Bank of New York City testified against it. And some low-income advocacy groups argued that the tax would financially burden poor New Yorkers while doing nothing to improve their access to exercise or fresh, affordable, healthy food.

Finally, Rep. Greenlick wants some of the revenue from the tax to go toward fighting obesity, but the track record of so-called “sin taxes” actually getting to such programs is poor. They often end up being diverted to other purposes; note that tobacco tax revenue, and even revenue from settlements with tobacco companies, often end up somewhere other than in smoking cessation programs. Why taxing soft drinks will fare better is a hard case to make.

Steve Buckstein is founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Posted by at 05:00 | Posted in Economy, Individual Responsiblity, OR 76th Legislative Session, Oregon Government, Oregon House | Tagged , | 34 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Nosodaforme

    I firmly believe that the government MUST tax soft drinks and tax them heavily. They have been PROVEN to be harmful to people who drink them. Diet, regular, 1 cal, it doesn’t matter – these drinks and bad news.

    Should there be a tax, say of $1.00 per can, as has been suggested by many in the nutrition field, it would cut down on teen and adult use of these harmful beverages by at least 40% according to studies done recently.

    The health care savings alone would be huge, as these crazy teens and adults would find something else to drink, like cranberry juice, prune juice, iced tea, water, etc.

    Any health care professional will tell you they see many teens in their offices for soda related problems, like weak stomach wall lining, being too fat, addiction to caffeine, weak muscles, autism, throat cancer, ADD, and countless others.

    With a hefty tax in place, it is simple math. People will drink less of these gateway beverages. Much less. How could a poor person afford a $2.50 can of soda pop? They could not. Thus, something else will they drink.

    This cannot happen soon enough for me. I have seem both my teen daughters succumb to this devil’s brew, and it has not been pleasant. One of my girls is grossly overwieght and the other is getting all F’s from ADD, both caused by the soda they consumed. They, in their heyday, were drinking two or three 64 ounce bottles a day between them. A big gulp for them was just getting them started. And the burping was extremely frustrating.

    I tried to get them to stop, but could not do so, as whenever they were out of the house they would use their allowance to buy soda, and what could I do to stop that?

    This tax would have certainly had an effect on their ability to buy and consume these evil beverages foisted on us by corporate greed and such like.


    • Steve Buckstein

      Unfortunately for those with your view on this issue, the proposed bill would only add about 6 cents to a 12 oz soft drink can. If you really want to stop people from drinking them, rather than advocate a $1 tax per can why not call for $10 or $20 per can? Just think of the revenue your benevolent state officials would receive to do good works. Or, why not advocate making sugar sweetened soft drinks illegal. Remember how well that worked out during the alcohol prohibition era?

      Seriously, there are simply too many unintended negative consequences to such “sin taxes”, let alone the fact that government should not be making our food and drink choices for us.

      • Nosodaforme

        OK – five bucks it is! Bring it on. I only drink bottled water from Fiji, so I don’t care what these morons do.

        • Steve Buckstein

          I think you missed the bill that taxes imported bottled water. Since most of us buy American bottled water, I’m sure legislators won’t mind balancing the state budget on your Fiji purchases.

  • Bob Clark

    A lot of people including myself wouldn’t find much happiness in a life of only water and celery sticks. When you tax such things as soft drinks, you remove a part of people’s reward system for being productive and over achieving. If our lives are based on nothing more than working for a glass of water and some celery sticks, we will be a nation of decline. So, the state legislature owned and paid for largely by public employee unions, forever needing more revenues to feed their flabby lives, needs to be put on a diet itself. Cut spending, and put a squash on any new tax schemes such as this. We advocate this for the health of our obess state government.

    As for purported health effects, it’s mostly about genes. Jack Lallane a vegitarian died over the weekend at 96. My grandfather who drank whiskey, ate meat, overweight for a good part of his whole like, and smoked; He also died at 96. Death happens to us all regardless of diet.

  • Steve Plunk

    Greenlick may not realize it but he is making a fool of himself. Ill advised bills that are not thoroughly thought out are likely to die in committee and be nothing but a waste of time. Time better spent on Oregon’s real problems.

    When will Greenlick’s colleagues take the time to give him a hint? The people of Oregon have had enough with with nanny state ideas and want our elected representatives to work on what matters.

  • Steve Plunk

    Greenlick may not realize it but he is making a fool of himself. Ill advised bills that are not thoroughly thought out are likely to die in committee and be nothing but a waste of time. Time better spent on Oregon’s real problems.

    When will Greenlick’s colleagues take the time to give him a hint? The people of Oregon have had enough with with nanny state ideas and want our elected representatives to work on what matters.

  • Oregonnative

    I think it starts in the home.
    We were allowed one soft drink a week, until teenagers. I personally liked chocolate shakes at A & W when I was younger.
    We were allowed to work in the berry fields, bucking hay, sweeping sidwalks, shoveling snow or just plain keep busy stuff, or whatever to make us self sufficent. In those days we could make about $300.00 per month with lots of long hours to go to the county fair in the middle 1960’s.

    So, if we made all kids start to learn work ethics at about 12 to 14, what would happen. Some social service overweight person on PERS will tell us we were abusing our kids, while their kids were playing video games at home, even more overweight for their age. Please refer to Oregon Labor Laws.
    Their are very few programs that assist kids with making an income that do not cost the other taxpayer to pay for it. What happens if a kid sits around for the growth of his ages, seeing that he does not have to do anything, as long as he is not angry. Why do you think crimes rates are down a bit, because everyone is getting money ” un-employment”.
    It is down to serve your kids good food, do not treat them with candy or softdrinks to shut them up.
    If we want a “Nanny Nation”, keep voting in these people.
    Do you all think, Oregon Senators and Representives might think something is more important… Like let us all get back to work.
    Have you heard that some employees ” un-employed and recieving Un-employment, do not have to take a job, under their previous wage.
    That is it for toniught.

  • valley person

    There is nothing wrong with taxing soft drinks. Taxing things that are known to be harmful and clearly have no redeeming value makes more sense than taxing things that are not harmful and have value (like work).

    Like Chris Rock says, if we taxed bullets at $5000 each, we would way cut down on random shootings.

    • Steve Buckstein

      “There is nothing wrong with taxing soft drinks.

      Nothing wrong? Even if the vast majority of Oregonians agreed with you that such drinks are “harmful” that wouldn’t justify forcing consumers to pay more for them. If it did, where would it end? I think we all know that answer.

      And, if we taxed bullets at $5,000 each, I doubt it would cut down on random shootings. More likely, it would lead to a thriving black market in bullets. Unregulated bullets at that. No quality control; no age restrictions for purchase, etc. I don’t think you’d like the world you’d create with such a tax.

      • valley person

        I guess I start from a position that taxes are necessary to have a functioning government, and that it makes sense to tax things proven to be harmful. So I’d rather tax colas than carrots.

        Unregulated bullets? We already have unregulated bullets Steve.And we already have illegal sales of guns and ammo, so I’m not sure what you are getting at.

        But when a crazy dude can walk into a store and buy a gun, then walk into a Wallmart and by 30 round clips, then walk out the door and start shooting, there isn’t much need for him to buy underground is there?

  • Bbinc

    Has anybody ever thought of bringing that type of education back in the classroom?
    Has anybody ever thought of educating parents.
    I’m tired of having all this nit picking stuff going on.
    Yes they are correct, diet definitely does contribute to diabetes and heart disease, But does making everybody pay for the failure to instruct and educate people about diet. Don’t make me pay, make the fat lady pay.

  • As an enormous consumer of Diet Coke I am, of course, completely opposed to any additional taxes on soft drinks (at least on Diet Coke). We’re already taxing these products to death in the first place: Coke pays corporate and property taxes. All the grocery stores, convenience stores, gas stations, bowling alleys, etc that sell Diet Coke pay corporate and property taxes. The trucking companies that deliver my Diet Cokes to the stores all pay huge (and recently increased) over-the-road taxes, plus corporate and property taxes. The company that makes the aluminum cans (or the huge paper or plastic cups) that my Diet Coke comes in pay corporate and property taxes. The television stations, radio stations and other advertising media that run ads telling me I can’t be a man cause I do not drink Diet Coke pay corporate and property taxes. Many of these firms pay many other kinds of taxes as well, including sales taxes. I’m against adding to my burden.

    • Steve Buckstein

      I think the bill only taxes sugar-sweetened soft drinks. So, diet drinks probably won’t be hit by this bill. Hopefully that doesn’t turn you into a supporter of the bill…LOL

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