Tax Analysts Blog

Last Stand for Soda Taxes -- Hopefully

Posted on Oct 8, 2014
Politico recently published an excellent article on the upcoming initiative vote in San Francisco and Berkeley, California, to impose excise taxes on soda. Politico basically said the proposal is the last hurrah for proponents of soda taxes. If they can't get folks in uber-liberal San Francisco and Berkeley to vote for soda taxes, they should just hang up their hats. The article notes that soda tax advocates have failed 30 times across the nation.

Interestingly, Politico describes the levy as a sin tax. Since when is drinking soda a sin? What church characterizes Coca-Cola that way? I've never heard a priest, minister, rabbi, or imam denounce the evils of Dr Pepper or even supercharged Jolt. I wonder if the nice people in Berkeley would refer to marijuana taxes in a similar vein.

The American Beverage Association is going all out to defeat the measures, arguing that it's none of the government's business if you relax with a Coke and a smile once in a while. They also argue that the tax is regressive. Rich people tend toward bottled water, while the poor kick back with a cold soda. Despite the association's pecuniary interest in the outcome, the group is right on both counts. This is government overreach, and it punishes poor people. I wish my friends at Citizens for Tax Justice and the Center on Budget and Policy Priorities would criticize the proposals on the regressivity argument.

Proponents of the measures say soda makes you fat and that you shouldn't drink it. I guess if you drink five or six Big Gulps of Coke every day, you'd gain some weight. But if that's the concern, why not tax doughnuts, milkshakes, double cheeseburgers, foie gras, calf's liver, or white bread -- all of which will make you fat. Heck, why not tax kids sitting in front of computer games?

The pro-tax people don't care about fat people any more than they care about poor people. They're busybodies looking for an opportunity to tell someone what to do and how to live. I hope the folks in San Francisco and Berkeley say no. And I hope Politico is right and that this is the last fight on this issue.

This post is an excerpt of an article that first appeared in State Tax Notes.

Read Comments (7)

edmund dantesOct 7, 2014

When did "liberal" stop meaning a commitment to personal freedom and start
meaning "the government is smarter than you are, so you better change your
behavior!" To call the advocates of soda taxes "busybodies" is very kind, when
"fascists" is probably closer to the truth.

emsig beobachterOct 7, 2014

You should not be impugning the motives of people with whom you disagree.
Perhaps they are attempting to apply the Ramsay Rule to the consumption of
items which include negative externalities in the Pigovian sense. That is, if
consuming excessive amounts of sugary sodas adds weight to people; and, the
extra weight causes medical problems which, if these are low income people
doing the consuming, society bears the additional medical costs, then it may be
good public policy to impose additional taxes on these items. This assumes that
health insurance providers cannot charge the appropriate premiums to compensate
them for the additional risk they bear for insuring consumers of sugary

Considering all the risky behaviors that people exhibit, it would be impossible
to tailor each person's premium to take into account all relevant factors.
Perhaps there should be excise taxes on motorcycles, skydiving, marathon
participants, etc.

This posting exhausted me. I'm going to relax smoking unfiltered cigarettes and
have a couple of belts of bourbon.

edmund dantesOct 8, 2014

David, at least I said "probably." However, I was also echoing Jonah
Goldberg's analysis of modern "liberals".

emsig beobachterOct 8, 2014

Average Joe -- all taxes are "money grabs." Actually, anything that commands a
positive price in the market place is a "money grab." Paraphrasing Adam Smith,
Thomas Malthus, David Ricardo, Jean Baptiste Say, Alfred Marshall, Milton
Friedman, etc.

Average JoeOct 9, 2014

While I'm not a tax guy, I do enjoy reading and learning about some of this
stuff. So here are some thoughts from John Q. Citizen. Soda taxes to me see
completely idiotic. I would love to see how they do this fairly. What about
diet soda, what about a 12 oz can vs. a 20 oz bottle? What about the self
serve fountains where people can refill as many times as they want? Let's just
call it what it is -- a money grab.

david brunoriOct 9, 2014

wow, Edmund, I refrain from using the term fascist very often. I am not sure
the proponents of soda taxes (however distasteful) are on par with Hitler,
Mussolini, or Franco.

Emsig, cigarettes and bourbon remain among the best things man has invented.

And Average Joe, you may not be a tax guy, but you I think you understand this
issue very well.

amt buffOct 9, 2014

emsig, you put your finger on a problem with egalitarianism or socialism. If
all costs are socialized, then everyone has the right to tell everyone else how
to live, so as to minimize those costs.
Requiring people pay for their own bad decisions with their own money is a
necessary condition for freedom. Reducing the former reduces the latter.

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