By Michael McCune
The United States government has had so much success recently selling controversial, intrusive legislation as “for your protection” that it is reaching into new territory with another law that will be upheld by the laisse faire Supreme Court.
The tax on soda is back on the table. Proponents are asking for a mere penny per ounce tax on sodas, presweetened drinks and “other high-calorie, nurient-deficient beverages” whatever that entails. They claim the tax will raise $13B annually in revenues for the government, save $17B annually in medical expenses and prevent 26,000 deaths over a 10-year period.
As usual the facts outlined by the proponents do not fit with facts based in the real world. Americans consumed 13.8 billion gallons of the targeted drinks in 2009. A gallon is 128 ounces meaning there would be $1.28 raised per gallon consumed. That actually equates to 1.77 trillion ounces of consumed drink and $17.7B in revenue for the government. The proponents responded, “I didn’t consider the 15% reduction” in consumed drink they are anticipating by imposing the tax. Even a 15% reduction from 2009 levels would leave the government with $15B in additional revenue, a 10% increase over the “learned findings” of the study. The anticipated reduction is probably going to be closer to 5% than 15% which leaves the government with a $16.8B windfall. What’s also unsaid is how will the American public react to a $1.44 increase in the price of a 12-pack of soda when they know an inept government is the beneficiary?
The researchers also assumed that 40% of the calories saved by reduced ingestion of taxed-soda calories would be replaced by milk and juice consumption. That assumption cannot be borne out by any of the report’s data because the AMA is asking Americans to cut back on milk consumption as unhealthy and all juice has some sugar in it–which means it will have to be taxed as well. This tax is the ultimate indictment of the Progressive policy in that it proposing legislation to delay one of life’s inevitable ends–death–while boosting the second inevitable outcome–taxes.
The core of the legislation is to regulate obesity. Americans, per capita, consume 70,000 calories per year in presweetened drinks. The proponents are hoping for a reduction of nine calories per day or a 4.69% daily decrease. By the report’s optimistic projections, as published in Health Affairs, that will save 867,000 people from obesity in 10 years. A rather startling conclusion considering not every overweight person consumes prolific amounts of such drinks and the hoped-for measure falls far short of the projected 15% reduction the tax is supposed to achieve.
Immediately after reading the article, I inventoried the food in my house. I had 744 ounces of soda, 736 ounces of bottled tea, seven pounds of granulated sugar, enough prepackaged kid drink for about two gallons of Kool-Aid which is sweetened by the sugar I have on hand, several gallons of bottled juices and 41 cans of fruit–all neatly packed in sugar syrup. Now if the AMA is right in another assertion, that the body cannot distinguish one sugar from another, all that could be taxable in the near future. I figure the cost would be about $1400 if I converted it to a liquid candy measurement as per the bill. That alone is 20 times more than the proposal is supposed to assess against each American. That is how flawed the projected figures are.
But the final insult is the reported 2,600 deaths per year that would be saved. That amounts to 8.37 people in every 10,000 in America. If this was an impotant criteria for passing a bill, nobody would be driving because cars and trucks would have been banned long ago for the deaths, injuries and attendant medical bills they create.
Proponents assert the bill is necessary because Americans cannot be trusted to drink what is prescribed or curb their sugar desires. The same can be said about the government or has anybody noticed the official national debt now exceeds the official GDP? All this data “officially” puts us in the Banana Republic category.
There is proof higher taxes or even prohibitions levied on specific items–tobacco and alcohol–do not significantly alter American habits. Peer pressure does a much better job of altering behavior. But peer pressure won’t be immediate, it will have to be aimed at the babies still not weaned and future generations beyond that. This extends the time line for the study’s positive effects far into the hazy future past their 10-year projection. It is also convenient for government that it does not consider food cost as part of inflation so it can tell you blandly, “This is not an inflationary measure.”
That’s how progressives work. They plant the seed and will wait decades for the bureaucratic tree to develop. After all, they are “doing it for you” if not specifically their version of utopia. Discouragingly, this is an objective of the Obama Administration as well and if Congress won’t pass this bill, I’m sure an Executive Order is already primed to be signed to get it accomplished.
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These pieces really set a standard in the industry.