Soda tax redux

by Keith Nunes
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WASHINGTON — Representative Rosa DeLauro of Connecticut has introduced the Sugar-Sweetened Beverages Tax Act, also called the SWEET Act. The legislation would impose a tax of 1c per teaspoon of caloric sweetener, such as sugar or high-fructose corn syrup. The monies raised by the tax would be used to address obesity and diabetes. In addition, it is believed a higher price for beverages featuring caloric sweeteners may reduce consumption.

“People want to be healthy and they want their kids to be healthy,” Ms. DeLauro said. “But we are in the midst of dual epidemics, with obesity and diabetes afflicting our nation and the related, astronomical health care costs. There is a clear relationship between sugar-sweetened beverages and a host of other health conditions, including diabetes, heart disease, obesity and tooth decay. We are at a crucial tipping point, and the SWEET Act will help correct the path we are currently on.”

Efforts the monies would be put toward include prevention and treatment programs, research and nutrition education. Chronic diseases associated with obesity are responsible for an estimated $190 billion in annual health care costs, over 20% of which are paid by American taxpayers through Medicare and Medicaid, Ms. DeLauro said. The bill is supported by a coalition of public health and consumer groups, most notably the American Heart Association.

This is not the first time a national tax on sugar-sweetened beverages has been proposed. In 2009, during the debate about the Affordable Care Act, the inclusion of a tax in the legislation was proposed but never gained any momentum.

Where “soda taxes” have gained momentum is at the state and municipal levels. Taxes related to beverages featuring caloric sweeteners have been enacted in 34 states and the District of Columbia. Municipalities also have passed their own soda taxes.

Residents in San Francisco will vote this November on a soda tax. Proposed by San Francisco Supervisor Scott Wiener, the ballot measure would impose a 2c per oz tax on sugary beverages. The tax would amount to a 24c tax on every can of 12-oz soda sold in the city. The revenue generated by the tax would be used for nutrition, physical activity and health programs in public schools, parks and other city programs.

But Christopher Gindlespreger, senior director of public affairs for the American Beverage Association, contends that such taxes are ineffective.

“The soda tax is an old idea that has gotten no traction in federal government, states and cities across the U.S.,” he said. “People don’t support taxes and bans on common grocery items, like soft drinks. That’s why the public policy debate in the U.S. has moved away from taxes and bans and onto real solutions.

“We are focused on meaningful solutions that help address the complex problem of childhood obesity. Working with First Lady Michelle Obama, President Bill Clinton, the U.S. Conference of Mayors and others, we have voluntarily removed full-calorie soft drinks from schools nationwide, placed calorie labels on all of our packaging as well as on vending machines, supported community programs that promote balanced diets and physical activity and much more.”

The National Automatic Merchandising Association (NAMA), which represents the owners of vending machine businesses throughout the country, expressed opposition to the bill introduced by Ms. DeLauro.

“Taxes of any kind on sugar-sweetened beverages unfairly target industries that have worked to be part of the solution surrounding nutritional education and healthy choices,” said Eric Dell, senior vice-president of government affairs for NAMA. “It will also create new liabilities for vending and food service companies, which could result in loss of critical jobs and taxable revenue, and will drive up food and beverage costs.”

The association also maintains that taxes on beverages would single out only one source of calories and would not encourage healthy lifestyles or combat obesity among consumers.

“In fact, according to government data, sugar-sweetened beverages account for less than 7% of calories in the average American diet,” Mr. Dell said. “A federal tax of this nature is a classic example of the kind of government overreach that completely dismisses the role of consumer choice and responsibility.”
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