Recently, efforts to institute a new soda tax in New York State failed, as the tax died a relatively quiet death last week on the floor of the New York State legislature. It was one of the first soda tax efforts nationwide, and as such, it sends a signal to other states considering similar legislation.
So, is this a good thing or a bad thing?
I'll try and frame up the debate by throwing out a few thoughts. First, I'd support the soda tax if I could reasonably trust in two things: 1) the data used to justify the tax, and 2) that the state would actually apply the tax revenues towards effective anti-obesity programs.
I'll be honest, I'm struggling on both points.
The experience with tobacco settlement proceeds over the past decade or so gives us a highly instructive example. Sadly, almost every state that received tobacco settlement money simply blew the bulk of the money up front to plug existing budget holes. The money, uh, kinda sorta just got spent. Worse, even after all that money washed though the system, smoking rates didn't really decline all that much. As a society, we lost an enormous opportunity there.
A related point: many people don't understand why the beverage industry spent so much money trying to fight off this tax (The New York Times claims that the American Beverage Association spent some $9.4 million to oppose soda taxes in 2010 alone).
I'm not sure I can justify that spending, but I can at least attempt to explain the logic behind it. First, once you GET a new tax, it's very difficult, politically speaking, to stop it from going higher. See cigarettes as Exhibit A, and notice that while New York failed to pass a new tax on sweetened drinks, they had no problem jacking up the tax on cigs by another $1.60 a pack (trick question: how much of the proceeds from this tax increase will go towards effective anti-smoking efforts?). This might help explain why the beverage industry felt it was worth spending what seemed like an out-of-proportion amount of money to try and prevent the tax in the first place.
Look, I lurve the idea of people drinking less soda. Long time Casual Kitchen readers well know that soda is a prime example of a second-order food. It's loaded with extra processing, transport, branding and marketing costs--all borne by the consumer. Worse, drinking these beverages is an easy way to ingest frightening amounts of calories. I preach about this regularly here at Casual Kitchen.
And that's why, initially, it seems so easy to make an argument for this tax. Almost too easy. Charge a little more for soda, give the money to the state, and use a little social engineering to try and do something about obesity. Hey, you never know. Maybe you'll massage peoples' behavior for the better. (Of course, your ability to make statements like these also depends on your philosophical position on the government's role in making our choices for us).
Finally, theory and idealism about how a tax should work is one thing. But as always, the devil is in the details, specifically with the state's tenuous promise to use the money appropriately and judiciously.
Readers, where do you stand on soda taxes, and why? [Strong opinions are welcome, but as always, please keep it civil.]
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