Obama Soda Tax 2009 Idea Gains Traction in 2010

When President Obama discussed a soda tax in 2009, he also noted that there would be Capitol Hill opposition to any kind of new sin tax. Nevertheless, it appears that the soda tax idea is gaining traction in 2010. How much does it cost to alter consumer behavior?

The Obama Soda Tax 2009 Idea

In an interview with Men's Health, President Obama considered a new sin tax as a means of reducing the public's demand for sugary soda. Citing the obesity and sugar-laden soda connection, the president found that - in order to impact the population's health - curtailing soda consumption is a helpful endeavor. A subsequent poll by the magazine showed that 56 percent of respondents were in favor of a soda tax, while 44 percent opposed this new sin tax.

Soda Tax Idea Gains Traction in 2010 Kansas City

Although opposition to a new tax is likely and conservative as well as moderate voters are sure to take exception to another government intrusion into the daily lives of the electorate, the Obama soda tax is now gaining traction. Fast forwarding to 2010, Kansas City Star editorial page columnist Yael Abouhalkah points out that "taxing bad behavior makes sense."

A soda tax would raise revenue while at the same time potentially reduce obesity. The columnist warns readers that the loudest protests are likely to come from the soda industry, which is undoubtedly going to threaten the loss of jobs - the very last thing consumers want to hear in a tough economy.

An 18 Percent Tax?

It is unclear who would be in charge of the soda tax, should it come to pass. Would it be a local three cent soda tax? Should be a federal tax, soft drinks would carry? Should it be a state issue? How much should the new sin tax be in the first place?

Reuters suggests that adding an 18 percent tax on soda as well as pizza has the potential of sufficiently decreasing demand to reduce the average person's weight by five pounds over a 12-months period. The Centers for Disease Control and the American Heart Association appear to be soundly behind the idea of the Obama soda tax.

Soda Tax Proposals Take Shape

New York State has handed in a proposal for a 12-cent soda tax. California's Democratic Senate Majority Leader Dean Florez introduced a bill calling for a one-cent tax on each teaspoon of "added sugar and other caloric sweeteners in commercial beverages."

While California proponents seek to garner support for the soda tax by making it a health issue 'for the children,' more cynical Californians look at the state's epic budget shortfall and see a money-grab. It is also questionable how this new sin tax affects diet sodas that do not actually contain any calories.

Sources
Men's Health. "Sweet on a Soda Tax?" (accessed March 10, 2010)
Kansas City Star. "Soda tax makes great sense" (accessed March 10, 2010)
Reuters. "Tax soda, pizza to cut obesity, researchers say" (accessed March 10, 2010)