Soda is generally a loss-leader item to bring people in. It will migrate traffic out of the DC area. If a store doesn’t carry an item (any item) that I want I will buy that item at the store that carries it as well as my other purchases.
Micromanagement is not a legitimate function of government. There is no end to the direction this philosophy can take.
We don’t need philosophy in government, we need pragmatism. But if you want to take the philosophical route, we already tax the holy hell out of cigarettes and alcohol, and I bet they don’t hold a candle to the public health problems junk food is causing. And then coming full circle back to pragmatism, high cigarette taxes and advertising regulation are widely thought to be causes of the reduced smoking rates in America (less than half what they were in 1955 when these disincentives didn’t exist.)
Is it really a vice tax, designed to deter people from drinking a product bad for them, or drink more in moderation, as opposed to a revenue raising tax? In other words, maybe this is not a tax to deter behavior as much as a recognition of people will consume at the present rate and as a result, this is a guaranteed revenue maker, a consistent and steady flow of revenue.
But collecting tax revenue is a legitimate function of government, and I don’t see anything particularly dire about the government focusing some of its revenue collection activities on things that have an overall negative effect on public health.
If the government were making individuals fill out forms and get official approval before they were allowed to buy a soda, I’d be as horrified as your libertarian heart could desire. But they’re not. All they’re saying is “Hey, this shit’s bad for you and contributes to public health problems, and while you’re nonetheless fully entitled to go on buying and drinking it anyway, it’ll cost you a bit more.”
That makes the tax outcome a win-win situation: On the one hand, if people don’t lower their consumption of unhealthy foods as a result of the tax, then the government gets more money. On the other hand, if people do lower their consumption of unhealthy foods as a result of the tax, then we have a healthier population (which saves the government money in other ways). Win-win.
The problem is that an Emory University economic study found that a 58% tax (the same percent of taxes on cigarettes in most places) is calculated to lead to only a 0.16 reduction in the American Body Mass Index. In the DC, the proposed beverage would do nothing.
The sin tax on cigarettes never worked as advertised. Does anyone else remember runners finishing marathons only to light up in the early 80’s?
I’m basically with Mr. Excellent all the way.
I had a big argument with my roommate a few months ago about a possible soda tax, and me feelings then and now were:
[ul]
[li]A tax on soda is not going to significantly alter the amount of soda people drink unless the tax were so high as to be ridiculous. All a few pennies per can will do is create a revenue stream for the government.[/li][li]Picking soda is a 100% arbitrary, ‘feel good’ measure. There are hundreds of other foods people eat in excess on a regular basis that are unhealthy. Why not tax them? Picking soda but leaving out potato chips, or even juice, makes no sense. [/li][li]Any overweight or otherwise unhealthy, non-soda drinker who supports this tax is a hypocrite. Let’s tax whatever poor health choices you make, Mr./Mrs. I know what’s good for other people . . . which leads to:[/li][li]Unhealthy habits are the issue, not soda. Adding the tax will not change people’s behavior. If you want to fund health programs, do so, but taxing any vice is nothing more than a money grab, and you’re blind if you believe otherwise.[/li][/ul]
What puzzles me is why we’re supposed to be shocked or indignant about the unremarkable fact that the government is looking for ways to grab money. What do you expect them to fund those health programs with, anyhow?
We all agree that the government has to get tax revenue from somewhere, right? And there are pros and cons to absolutely every tax.
There are drawbacks to “vice taxes” just as there are to any other tax, but I really don’t get why people would believe so passionately that vice taxes are so much worse than other taxes.
If it’s misrepresentation that’s bothering you, yes, I quite agree that lawmakers shouldn’t lie about the extent of the public health benefits that a new vice tax will produce. However, that’s not in itself an argument against the tax per se.
I am not familiar with D.C. politics, so feel obliged to inform me with facts. Your remarks assume the tax was imposed to deter unhealthy behavior. What if, however, this particular product was selected, not to deter behavior, not because the product is bad for health, but because imposing a tax on it would not deter the behavior and consequently, provide a consistent and reliable source of revenue?
However, I will assume, for the sake of argument, your presumption is correct. When a legislature, city or county government, is choosing to deter the consumption of some unhealthy product, must they tax all unhealthy products before a tax on one makes sense? I do not think so. Yes, perhaps there are other products equally unhealthy, but does this change the fact product X is unhealthy? Does this change the fact it makes sense not to consume product X because it is unhealthy? If the government is seeking people to have and live a healthier lifestyle, then taxing to the point of minimal or zero consumption of an unhealthy product makes sense. Removing one unhealty product from consumption, by imposition of taxation, is to have people live a healthier lifestyle.
My question with this tax is what about the private owners of soda machines? Around here, you can get a 12oz soda from a machine for about 65 cents. This includes the local churches that have soda machines. In the churches I know of, the people who load them just go to the local Sam’s/Costco/BJ’s and buy in bulk… It was mentioned up the thread that DC doesn’t have one of these, so are they going to go out of the district to buy their soda… Is DC going to enforce the rule on these local soda machines? How will that work out?
I don’t know much about the DC issue beyond the link in the OP, but to quote the woman who proposed the tax:
. . . she seems to be suggesting that a tax on soda will reverse the obesity epidemic. I’m not sure what CDC studies she’s citing, but I call shenanigans. I just don’t believe that an extra 10-15 cents per can is going to keep people from drinking as much soda.
My big issue is that I don’t believe it is a deterrent. Calling it so is a way to get busybodies and holier-than-thou health food proponents (most of whom sit solidly in the middle and upper class) to get behind a tax increase on those stupid people who drink that evil beverage, unlike their enlightened selves.
See above. Yes, taxes are important, but the claim is that the tax is justified by it’s ability to change behavior, which is either a lie or willfully blind pipe dream.
And, if I went to the store and bought a soda, and there was a sticker on it that said, “the government is charging you 10 cents to buy this because you’re doing something unhealthy,” well, I’d be pretty damned pissed off. A can of soda occasionally inserted into my otherwise ideal diet/exercise regimen is most definitely not unhealthy.
If the government really needs to raise taxes, then do so on income or something like that, don’t tax people based on their beverage preferences. This is just a way for the educated and sophisticated consumer to tax people they feel superior towards.
I’d say it’s more like a politically easy tax. Raising income taxes to produce the same revenue would tick off more people. Well, when it first hits the news anyway; the actual difference would be tiny.
IME, a lot of people seem to be okay with sin taxes on their sins. Most people drink alcohol, hardly anybody really objects.
Still, at a national level, it would improve the bottom line more, and make more sense, to just remove price supports for corn.
If it was purely a revenue tax then it would be across the board. This tax represents a couple of individuals who have taken it upon themselves to regulate behavior.
Obligatory “did you even read my post?” here. Because you obviously didn’t. My point, as I proposed and you ignore, is that those price sensitive soda fans who have access to the transportation needed to make possible going to the suburbs to pick up 12-packs already do it, because they’re already getting a very substantial discount to do so. The people who don’t do that either don’t care or can’t get there with the reliability and cargo capacity necessary. Sticker price and actual price aren’t the same thing.
As for “micromanagement” – well, whatever. When government stops subsidizing corn farmers to such an extent that soda is incredibly cheap to make, this argument might have merit. Until then, pretending that this bill is distorting a natural market is just goofy.
–Cliffy
I call bullshit. Everything I’ve ever read has profit margins on soda (whether bottled/canned or fountain) in the hundreds of percentage points. If soda was a loss leader, how would soda vending machines be a profitable venture? Even self-serve fountain stations with free refills are profitable. I just don’t buy this statement at all.
That said, I’m indifferent to sin taxes, but I do see it as nothing more than a money-making venture for the government, just like the lottery is. The thing that really bothers me is what BrightNShiny brought up. Corn subsidies are what keep the prices of soda artificially low. If the government really cared about the health of its population, it would end the subsidies and stop feeding school kids the same crap they’re upset at parents for feeding them.
The obvious difference between a Mountain Dew and Naked Juice is that the MD is simply empty calories that have very little nutritional value and does not satiate, which encourages overconsumption. An Odwalla or any other real fruit juice has about as much sugar but also offer nutrients in the form of vitamins and minerals. The problem with fruit juice is that it often lacks the fiber present in actual fruits that satiates and reduces overconsumption (although some do have a little bit of fiber). It would be better if people got their simple carbs from raw fruit and hydrated with plain water, but given the choice between soda and fruit juice, the latter is the better choice.
Soda is used as a loss leader in grocery stores, specifically, not in general. This doesn’t mean they’re always selling every soda at a loss, but selling bottles and cans cheaply on sale does bring in traffic. Have you noticed how frequently soda is included on supermarket circulars? There’s nearly always some kind of soda with some kind of significant sale. I’ve seen tons of people run into supermarkets and fill a cart with soda on these sales – even filling up a separate cart with groceries.
If you drink a lot of soda and don’t make much money, buying in bulk on sales helps, especially if you’re particular about brand.
I guess I misunderstood the statement that “soda generally a loss-leader item to bring people in.”
I don’t really pay much attention because I don’t personally buy soda very often, but when I do, I am brand particular (Fresca) and buy it on sale. Though, I really couldn’t say how often it goes on sale. In the interests of full disclosure, soft drinks are a treated as a treat in our household and not consumed all that often.
That said, I’m sure the tax will apply to every outlet and I’m sure groceries have other loss leaders (such as milk and bread) that will still fill the niche if the price of soda goes up. Incidentally, I couldn’t find any cites of what profit margins for soft drinks actually are for groceries, so I’m still not convinced.
Not the best cite but it shows that it’s common knowledge.
Stores use many loss leader items to draw people in. If multiple products contain this sin tax then people will migrate outside the tax zone to avoid them.
I’ll say it again. There is no justification for a handful of elected officials to take it upon themselves to target product purchases with punitive taxes.
And you’ve ignored every argument in this thread for why it makes sense, so your statement doesn’t hold much weight.
This is no argument for a nanny state unless you think you are personally too stupid to conduct the affairs of your own life.
City council hearing on the sales tax issue going on right now on DC Cable TV web site.