The nutrition and food safety watchdog group launched a web-based Liquid Candy Tax Calculator to show policymakers, activists and media exactly how much money states and the federal government could raise in this way.
For instance, a new federal excise tax of one penny per 12-ounce soda could generate more than $1.5 billion dollars per year, according to the calculator. A steeper tax of one penny per ounce could raise roughly $16 billion a year—an amount that would make a serious down payment on a comprehensive health care reform bill.
CSPI estimates that taxing soda at that amount would also reduce consumption by 13 percent overall and perhaps more among children, which would help slow the obesity and diabetes epidemics. The state of Massachusetts, which is weighing a sales tax of 8 percent on sugary drinks, could raise $105 million.
“Soda and non-carbonated soft drinks are basically liquid candy, providing nothing of positive benefit to the diet, just empty calories,” said CSPI executive director Michael F. Jacobson. “It’s cheaper than dirt, we consume too much of it, and it causes expensive health problems. The question is why has it gone untaxed for so long at the federal level?”
Also today, leading health care and nutrition advocates are urging Senate Finance Committee Chairman Max Baucus (D-MT) to tax soft drinks to help fund health reform. “While many factors contribute to weight gain, soft drinks are the only food or beverage shown to have a direct link to obesity, which in turn can lead to hypertension, strokes, heart attacks, diabetes, cancer, and arthritis, and other health and psychosocial problems,” the advocates wrote in a letter to Baucus. “In addition, consumption of sugary beverages can cause tooth decay and dental erosion.”
Besides CSPI, groups signing on to the letter include the American Public Health Association, the California Center for Public Health Advocacy, Consumers Union, Partnership for Prevention, Shape Up America!, and Trust for America’s Health. Individuals signing include Kelly Brownell of the Rudd Center for Food Policy and Obesity at Yale University and Walter Willett of the Harvard School of Public Health.
Separately, the Center on Budget and Policy Priorities has previously endorsed a tax on soft drinks to help pay for health care reform.
In April, Brownell and former New York City Health Director Dr. Tom Frieden published a much-discussed paper in the New England Journal of Medicine making the case for a tax on sugared beverages. (Frieden is now director of the Centers for Disease Control and Prevention.) The forward to the paper quoted Adam Smith, the father of free-market economics, thusly: “Sugar, rum, and tobacco are commodities which are nowhere necessaries of life, which are become objects of almost universal consumption, and which are therefore extremely proper subjects of taxation.”
CSPI’s calculator also displays the rates of overweight and obesity in the United States. and in each state, as well as the costs of medical care due to adult obesity. Of the $95 billion cost to treat obesity-related disease nationwide, about half is borne by Medicare and Medicaid.
Though a federal tax on soda would be new, more than a dozen states already have taxes on soda and other snack foods, including Arkansas, California, New York, and West Virginia.
In May, CSPI’s Jacobson testified before the Senate Finance Committee urging a new federal tax on sugary drinks, as well as long-overdue increases in federal excise taxes on alcohol, to help pay for health coverage for all Americans. When the committee released a list of possible funding mechanisms for health care reform, it did include raising alcohol taxes and a new tax on sugary drinks.
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