Governments at all levels are looking under their collective couch cushions for every penny they can find. Creative revenue generating ideas range from taxing pornography, to building racinos, to (legalizing and then) taxing marijuana. These are all variations on the tried-and-true “sin tax” formula.
A family friendly, PG version of a sin tax idea has been recently kicked around in the form of a soda tax. The U.S. Senate considered the tax in 2009 as a way to help pay for President Obama’s health care initiative. Both the Mayors of New York and Philadelphia as well as New York Governor David Patterson sought soda taxes in recent budget proposals.
On the surface, the soda tax idea is a good one: Offset the costs of healthcare programs with the tax, while simultaneously battling the obesity epidemic. It’s roughly the same justification for the steep rise in cigarette taxation in recent years. One could make the argument that, in fact, the nation’s obesity epidemic is of a greater public health concern than are the impacts of smoking.
But, the issue isn’t so clear cut. Is the soda tax justifiable when there is no essential nexus between the tax and the programs it supports? If the soda tax revenue is simply funneled into a state’s general fund, is it still justifiable on public health grounds?
What of a state budget that purports to use the funds for health care programs, but also makes cuts to those same programs in the same budget, as this article points out? What if the soda tax did not actually reduce soda consumption, as some studies claim that it would not?
Considering that a sales tax is regressive, and considering that some studies show that the poor tend to consume more sugary beverages than the average citizen, wouldn’t the brunt of the tax fall disproportionately on the poor? Is the tax equity issue enough to undermine the purported health benefits?
The soda tax debate is representative of the type of dialogue we're likely to see in the coming months as Minnesota looks to fill its 6.2 billion dollar revenue gap with new and creative funding sources.
Please, anything but a pizza tax.
