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Posted On September 14, 2009
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Soda tax is all fizz

By: J. Justin Wilson
Newspaper: New York Daily News

The prospect of a trillion-dollar health care overhaul has Congress looking under couch cushions to find enough new revenue to pay the bill.

Despite opposition from two-thirds of Americans, President Obama has latched onto exploring one proposal to raise billions of dollars through "lifestyle taxes" on soft drinks. Not only would a tax on soda (or food, or alcohol) generate a new revenue stream, but supporters claim that it would also drive down medical costs by reducing rates of obesity.

That sounds good in theory but falls flat in practice. Evidence demonstrates that arbitrary taxes will not reduce health care costs. Rather, life-style taxes represent just another ill-considered "get rich quick" scheme by the federal government - and an intrusive one at that.

"For your own good" interventions are taking lots of forms these days: locking up other people's liquor cabinets, confiscating salt shakers, installing an IRS bean counter into every vending machine. But the tax code shouldn't be a tool for punishing companies who make beverages that some people choose to over-consume. Nor should it be an instrument for penalizing individuals who make "bad" food choices.

What's next, a federal tax on every chocolate bar? I shouldn't suggest it; it could be coming. There's not a single compelling study that suggests taxing sodas at the level being discussed affects levels of obesity. An analysis this year concluded that, to actually make a dent in the obesity rate, Congress would need a 1,200% tax on soda. That means that to truly move the needle, a 75-cent can of soda would have to be taxed $9. (Better hope the vending machine takes $10 bills.)

And advocates of beverage taxes rarely talk about the fact that their taxes will hurt low-income Americans the most. That's because poorer Americans spend a greater percentage of their income on food and drink than high-income consumers.

The philosophy behind life-style taxes is quite popular in this administration. Cass Sunstein, recently nominated to lead the Office of Information and Regulatory Affairs, co-wrote the book "Nudge," which argues that government regulations should intervene and gently push us toward making government-approved lifestyle choices - in other words, what Sunstein and his bullies decide is best for us.

And while Sunstein suggests incremental "nudges," it would seem the Centers for Disease Control and Prevention's new director Thomas Frieden supports knockdown, drag-out fights in the name of turning private choices into a matter of public health. Frieden was widely known as New York City's trans-fat banning, calorie-labeling health commissioner until he took the helm at the CDC in June. And at the CDC Frieden hasn't wasted any time, calling for a soda tax in July.

Americans know a swindle when they see one. Along with widespread opposition to a soda tax, over 70% oppose such taxes on high-calorie foods, with half of respondents strongly disapproving. Here's a message to President Obama: The path leading to high soda taxes has already been "explored," and it was a bridge to nowhere.

J. Justin Wilson is the Senior Research Analyst at the Center for Consumer Freedom, a nonprofit coalition supported by restaurants, food companies and consumers to promote personal responsibility and protect consumer choices.




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