A classic big business and consumer battle is bubbling up over a proposal to tax sugary soft drinks. The tax is billed as a way to fight obesity while providing billions in funding for health care reform.
President Obama has said it is worth considering. ''I actually think it's an idea that we should be exploring. There's no doubt that our kids drink way too much soda". But Mr. Obama acknowledged that there would be significant resistance to such a tax.
A team of prominent doctors, scientists and policy makers says it could be a powerful weapon in efforts to reduce obesity, in the same way that cigarette taxes have helped curb smoking. It is estimated that a tax of a penny an ounce on sugary beverages would raise $14.9 billion in its first year, which could be spent on health care initiatives. The tax would apply to soft drinks, energy drinks, sports beverages and many juices and iced teas -- but not sugar-free diet drinks.
Coca-Cola Company. Chairman and Chief Executive Officer Muhtar Kent said the idea of a federal tax on soft drinks, under consideration by the U.S. Congress and President Barack Obama, is "outrageous." "I have never seen it work where a government tells people what to eat and what to drink." Kent said, "If it worked, the Soviet Union would still be around."
Published research on the topic appeared in The New England Journal of Medicine. The study cited research on price elasticity for soft drinks that has shown that for every 10 percent rise in price, consumption declines 8 to 10 percent. Kelly D. Brownell, the lead author of the study and director of the Rudd Center for Food Policy and Obesity at Yale, said in an interview that a penny-an-ounce tax would have an immediate and powerful impact on the nation's elevated obesity rate.
John Sicher, the publisher of Beverage Digest, a trade publication, said that, "A one cent per ounce tax would create serious problems and potentially adversely impact sales for the American beverage industry". The soft drink industry has adamantly resisted the notion that its products are responsible for a national increase in obesity or that a tax would help curb the problem.
The proposed tax faces a formidable hurdle in Congress, where several members have voiced strong opposition and few if any have said more than that they would be willing to consider it. And even a supporter of a beverage tax said it was not clear if it would have a direct effect on the waistlines of Americans.
"I think we should be satisfied that soda taxes would be having a modest effect on consumption but would generate billions of dollars that could be used to mount public health campaigns," said Michael Jacobson, executive director of the Center for Science in the Public Interest, an advocacy group that favors such a tax.
Nonetheless, discussion of the tax has the beverage industry on the defensive. The industry began to coordinate its response in June when it created an organization called Americans Against Food Taxes. On its Web site, nofoodtaxes.com, the group calls itself "a coalition of concerned citizens" opposed to "the government's proposed tax hike on food and beverages," including soda and juice drinks. Calls to a media contact listed on the site reach the American Beverage Association, an industry organization whose board is made up of top executives from the major soft drink manufacturers. Americans Against Food Taxes bought a full-page ad last Sunday in The Washington Post. It was fashioned as an open letter to Congress, saying "Don't tax our groceries." It has also been running commercials on cable networks, including CNN, MSNBC and Fox News, according to Kevin W. Keane, senior vice president for public affairs at the beverage association.
Across the country, many schools have removed soda vending machines saying they should not be plying children with sugary drinks. Last month, the American Heart Association urged people to reduce their intake of sugary foods and beverages to lower the risk of conditions like obesity and high blood pressure -- singling out soft drinks as a prime culprit.
He said that a tax was justified in part because conditions like obesity and diabetes are often treated with public funds through programs like Medicaid and Medicare. Revenue from the tax could help pay for such care.
Acknowledging how difficult it would be to get a tax through Congress, he said "State or local governments could take the first step". That would follow tobacco, which has been heavily taxed by states in an effort to reduce smoking and defray the costs of smoking-related illnesses.dside/loader.js" defer="defer">
