Filed Under: Fat Taxes Soft Drinks

Critics Sound Off Against Soda Taxes

The national momentum for soda taxes is unfortunately building as cash-strapped governments desperately search for new sources of revenue. Last week, Philadelphia Mayor Michael Nutter proposed a 2-cent-per-ounce tax on sugary drinks. California’s Democratic Senate Majority Leader, Dean Florez, has introduced a soda tax. And for the second year in a row New York Governor David Paterson is floating his own similar proposal.

The good news amidst this tax-happy mayhem is that people are starting to speak out against the costs (and unfairness) of such taxes. Former Philadelphia Mayor John Street criticized Mayor Nutter’s soda tax as punitive to the poor. “I just don’t know how you can put a 70 percent tax on a 2-liter bottle of Coke,” said Street. “It’s the poor people who are going to pay the sugar tax.” Mayor Street shares our view of the Nutter soda tax. (We’re denouncing it for “penalizing individuals who make food choices that some people in city government don’t like.”)

In the state of Washington, Governor Christine Gregoire’s proposal to impose an excise tax of 5 cents for every 12 ounces of carbonated beverages has been met with a lack of enthusiasm usually reserved for castor oil.  State Representative Ross Hunter says he will not support the tax, citing the negative economic impacts in a state already reeling from a 9.5 percent unemployment rate. “There’s a lot of good family-wage jobs that will be lost,” said Hunter. “That obviously factors in. I also just think it’s stupid.”

Bob Slack, vice president of Coca Cola Bottling Company of Washington, estimates that his company would likely reduce its workforce by 25 to 30 percent if the Gregoire soda tax is imposed. And Carole Dawson, who owns the Bremerton Bottling Company, says she would probably have to eliminate “good-paying jobs.” Dawson adds that “we already operate on a razor thin margin in a highly competitive marketplace.” A soda tax, she says, “will only depress our sales, and the effect will be felt throughout the entire local supply chain.”

It’s refreshing to see politicians and industry leaders highlight the detrimental economic effects of soda taxes. As we have reported, there is no evidence that soda taxes would even accomplish much in reducing obesity rates anyway. Besides being bad science, soda taxes are also bad business.

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