Beverage Tax Rebuttal

Recently a proposal was put forth by D.C. Council Member Mary Cheh to tax beverages in order fund programs and close the budget gap. Cheh is not innovative in her ideas. A similar tax has twice been included in Governor Paterson’s budgets for New York. Mayor Nutter of Philadelphia raised the stakes by suggesting that beverages be taxed at two cents per ounce. It is a bad idea that has migrated down the I-95 corridor.

The beverage tax’s proponents justify increasing the tax burden on the citizen with an appeal to the public health crisis of obesity. This is both shameful and misleading. While Cheh and other politicians point to laboratory studies suggesting that their tax would help combat obesity, the five most obesity states according to the CDC all have beverage taxes on their books. Not to completely leave the academics out of the argument, a recent economic study calculated that even a 58% soda tax, equivalent to the average taxation on cigarettes, might have reduce the body mass index by 0.16 points. As drinking water after eating five servings of apple pie is not a way to lose weight, this tax is not a solution to the problem of obesity.

If there was real political will on the part of Cheh, Paterson, Nutter and other politicians to face the public health crisis, their proposals would outline ways to make better food choices affordable for any family budget. Public facilities used for exercise and physical sport would receive greater priority rather then being the first on the budgetary cutting block. Building useful institutions and mechanisms within the community, rather then economic suffocation through regressive taxation would be the goal of these individuals.

It has been put forward that Healthy Schools Act of 2010 be fund by revenue from a D.C. beverage tax. The pitfall with this is the politician and their machinations. Repeatedly across the country at differing levels of government, the behavior of elected officials falls into familiar pattern. A new tax, a new lottery or a new toll is enacted to pay for a new program, a new initiative or a new public amenity. Only to see the politicians then cut the funding to the institution in the next budget cycle to pay for another pork belly project.

The beverage tax would include much more then just soda. Cheh’s proposal would target all sugary beverages. Sport drinks, juices, iced tea, lemonade, if it has sugar, Cheh wants to tax it. This would lead to confusion as baristas attempt to calculate the tax of a large black coffee with two sugars. It would be the 1993 snack food tax fiasco all over again.

The dividing line between low-income and outright poverty is a string of coins. Low-income families shop for food by looking at price tags, not the USDA food pyramid. Regressive taxation not only stretches the food budget, but could wreak devastation on the whole family economy. It isn’t the president of Pepsi that will join the unemployment line, but the delivery driver, the convenience store clerk and the hot dog vendor.