Soda Tax Weighed to Pay for Health Care

By JANET ADAMY

Senate leaders are considering new federal taxes on soda and other sugary drinks to help pay for an overhaul of the nation's health-care system.

The taxes would pay for only a fraction of the cost to expand health-insurance coverage to all Americans and would face strong opposition from the beverage industry. They also could spark a backlash from consumers who would have to pay several cents more for a soft drink.

On Tuesday, the Senate Finance Committee is set to hear proposals from about a dozen experts about how to pay for the comprehensive health-care overhaul that President Barack Obama wants to enact this year. Early estimates put the cost of the plan at around $1.2 trillion. The administration has so far only earmarked funds for about half of that amount.

The Center for Science in the Public Interest, a Washington-based watchdog group that pressures food companies to make healthier products, plans to propose a federal excise tax on soda, certain fruit drinks, energy drinks, sports drinks and ready-to-drink teas. It would not include most diet beverages. Excise taxes are levied on goods and manufacturers typically pass them on to consumers.

Senior staff members for some Democratic senators at the center of the effort to craft health-care legislation are weighing the idea behind closed doors, Senate aides said.

The Congressional Budget Office, which is providing lawmakers with cost estimates for each potential change in the health overhaul, included the option in a broad report on health-system financing in December. The office estimated that adding a tax of three cents per 12-ounce serving to these types of sweetened drinks would generate $24 billion over the next four years. So far, lawmakers have not indicated how big a tax they are considering.

Proponents of the tax cite research showing that consuming sugar-sweetened drinks can lead to obesity, diabetes and other ailments. They say the tax would lower consumption, reduce health problems and save medical costs. At least a dozen states already have some type of taxes on sugary beverages, said Michael Jacobson, executive director of the Center for Science in the Public Interest.

"Soda is clearly one of the most harmful products in the food supply, and it's something government should discourage the consumption of," Mr. Jacobson said.

The main beverage lobby that represents Coca-Cola Co., PepsiCo Inc., Kraft Foods Inc. and other companies said such a tax would unfairly hit lower-income Americans and wouldn't deter consumption.

"Taxes are not going to teach our children how to have a healthy lifestyle," said Susan Neely, president of the American Beverage Association. Instead, the association says it's backing programs that limit sugary beverage consumption in schools.

Some recent state proposals along the same lines have met stiff opposition. New York Gov. David Paterson recently agreed to drop a proposal for an 18% tax on sugary drinks after facing an outcry from the beverage industry and New Yorkers.

The beverage-tax proposal would apply to drinks that many Americans don't consider unhealthy -- such as PepsiCo's Gatorade and Kraft's Capri Sun -- based on their calorie content.

Health advocates are floating other so-called sin tax proposals and food regulations as part of the government's health-care overhaul. Mr. Jacobson also plans to propose Tuesday that the government sharply raise taxes on alcohol, move to largely eliminate artificial trans fat from food and move to reduce the sodium content in packaged and restaurant food.

The beverage tax is just one of hundreds of ideas that lawmakers are weighing to finance the health-care plans. They're expected to narrow the list in coming weeks.

The White House, meanwhile, is pulling together private health groups to identify cost savings that will help fund the health overhaul. Mr. Obama on Monday held a White House meeting with groups that represent doctors, hospitals, insurers, pharmaceutical companies and medical-device makers. They pledged to help restrain cost increases in the health-care system in an effort to save $2 trillion over the next decade.

"When it comes to health-care spending, we are on an unsustainable course that threatens the financial stability of families, businesses and government itself," Mr. Obama told reporters.

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It is getting so bad that the government now wants to target individual choices of food or beverages for special taxes.



What about Kool-Aid?

Where is the alcohol tax at? It kills more people than anything else, and nobody taxes it. Yet we want to tax sodas because of sugar? WTF

If this keeps up they will be taxing broccoli.

And let's not forget fast food, jeez that's stuff probably contributes more to health problems than even soda (even for thin people).

It's ridiculous, either tax everything "bad" for you or figure out something else. But to keep selectively taxing is ridiculous.

It's still only a proposal.

Three cents a can is not much though.

They can tax the broccoli, makes me gag anyway. Now if the start messing with mushrooms, though, I might have to get angry

I would like to see all taxes; done away with, within my life time.

Regardless of whether one thinks $0.03/a can is a lot or not much - where are we going to draw the line?

What will we have to be taxed on to say enough already, stop picking at my pockets!!!

Who makes the decision as to what to tax next?

I think we should tax those who wear white socks.
I think we should tax those that are left handed/right handed.

why do people want to tax things i like???? why pick on me???

I like broccoli. It's good as long as they keep snake heads out of it.

it's a conspiracy Rose

lol fran....you are behind it aren't ya??? you just want to take everything from me including my money

I hear you. I'm not concerned yet. It's only a proposal from an interest group says this 2 cans a day soda drinking, smoker. lol

but this is how it starts as a proposal, I remember just a couple of weeks ago paying $2.99 for a pack of smokes - now almost $5.00

not a happy smoker - everyone should pay

not sure but when I read your response, I can almost visualize it making it so easy to let my mind wander right to the gutter

I am behind nothing I am front and center

see fran??? it;s You doing it not me lol. you are corrupting ME

nope then it has to be Winx's fault then

Tiptoes away quietly.

I knew she was too sweet to be true

This administration's proposals will not help anything and they will cost us out livelihood. Sin taxes, health taxes, carbon taxes, where does it end? Even if his plans work and fixes everything (the economy, universal health care, etc.) who the will be able to afford to live?

I have seen articles showing how healthy food is actually considerably more expensive than unhealthy food.

You can blame whomever you like, but we all know it's yellowrose behind it all. Those damned Texas women.