Thursday, October 22

Mr. President. There is already a tax on Soda!

Recently, President Obama has come out in favor of a new tax on soda.
The President, in an interview with Men's Health magazine released yesterday, said he thought taxing soda and other sugary drinks is worth putting on the table as Congress debates health care reform.

"It's an idea that we should be exploring," the President said. "There's no doubt that our kids drink way too much soda. And every study that's been done about obesity shows that there is as high a correlation between increased soda consumption and obesity as just about anything else." - Daily News
Tell me if there is such a thing as a tax that President Obama is against.

A tax on soda is a ridiculous idea. Even more-so when proposed by the President, who should both know better as well as have better things to occupy his time with.

First, the whole reason for proposing such a tax, to discourage consumption as part of encouraging Americans to lose weight, is frivolous. Soda is cheap. Even doubling the price of soda is not exactly going to cut consumption by those who need to drink less soda. It will only cut consumption by those who view the higher prices as a waste of money.

Second, there is already a tax on soda. Take the main ingredient that should be in soda but is not, SUGAR. Why do they not put sugar in soda? It is too expensive to do so because Congress made sugar expensive. Generally, sugar prices in the US are twice the world price. Take a look at where most candy is being made these days. Much of what was traditionally US-made candy is now being made in Canada. Simply because the main ingredient, sugar, is much cheaper there.

As for soda, both Pepsi and Coke switched to corn syrup years ago because it is cheaper. But Congress likes corn farmers too and has been busy for years working to increase the price of corn products through increased demand. Corn syrup is one use. Then there is all the mandates to increase the use of ethanol, which is made mostly from corn. All of this raises the price of products that use corn ingredients. The ethanol mandate has been rather insidious as it has helped raise the price of corn around the globe. And as the cost of corn syrup rises, so does the price of soda. And when the price increases are a result of Government meddling, then that increased cost is a tax.

The sad fact in all of this is that due to the stupidity and frank dishonesty of Congress, the rest of us are basically denied better-tasting soda. Soda that by all common sense should be made from real sugar, not from inferior-tasting substitutes. Not only that, but it pushes people to switch to inferior products, only driving them away from the one that they want to consume.

Now comes news that the governor of New York is looking at the soda tax again, and this time he is not even pretending that this is anything other than a means of raising more cash for Government use:
Less than week after calling on lawmakers to address New York's budget crisis without raising taxes, Gov. Paterson fizzled out and suggested he would take another pop at passing a state soda tax.

"I promise I will put (the soda tax) back in my budget address and give the Legislature another chance to do it," Paterson said during an interview on WNYC. "But you can’t keep voting down the ways to create revenues and then saying you don’t want to make cuts." - NY Post
Finally, just to seal any doubt about how bogus a soda tax is, the CEO of CoCa-Cola slammed the idea of taxing soda to make Americans healthier:
Coke Didn't Make America Fat - Americans need more exercise, not another tax.

Our industry has become an easy target in this debate. Sugar-sweetened beverages have been singled out in spite of the fact that soft drinks, energy drinks, sports drinks and sweetened bottled water combined contribute 5.5% of the calories in the average American diet, according to the National Cancer Institute. It's difficult to understand why the beverages we and others provide are being targeted as the primary cause of weight gain when 94.5% of caloric intake comes from other foods and beverages.

Those pushing for this tax lack some essential facts, not to mention some basic common sense. Over the past 20 years, the average caloric content of soft drinks has dropped by nearly 25%. This is due in large part to a determined focus by our company and others on the diet/light category with brands like Diet Coke, Coca-Cola Zero and Powerade Zero. Even soft drinks with sugar, like Coca-Cola, contain no more calories (140 calories in a can) than some common snacks, breakfast foods and most desserts served up daily in millions of American homes. And while obesity rates have skyrocketed, sales of regular soft drinks decreased by nearly 10% from 2000 to 2008, according to the industry publication Beverage Digest. - WSJ
For more background on this mess, read the history of sugar price fixing here:
The Great Sugar Shaft - The Future of Freedom Foundation

Corn is Food - Not Fuel - 19 Aug 09

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