Taxes on Americas Favourite Beverage: Soda

TAXES ON AMERICA'S FAVORITE BEVERAGE: Soda THE STATE A SODA TAX REFERS TO THE ADDITIONAL TAX RATE ADDED TO THE GENERAL FOOD TAX RATES ON FOOD AND BEVERAGE PRODUCTS. OF SODA TAXES "The concept of a soda tax is very controversial here in America and it's an issue that has yet to be resolved," says John Block, MD, of Harvard Medical School, commenting on whether states should increase taxes on soda in order to reduce obesity. This can similarly be compared to sin taxes, which have had a positive effect on the consumption of products such as cigarettes, alcohol and gambling. However, as you will see below, hiking up the tax rates on soda does not have the same effect. ANOTHER POSSIBLE REASON FOR INCREASING TAXES ON SODA: In recent months, talks about ways to reduce the U.S. deficit have been circulating. An additional soda tax, which would be an excise tax on the manufacture and importation of beverages sweetened with sugar or high-fructose corn syrup, has $15 BILLION BY 2015. been estimated to raise more than Soda TAX RATES BY STATE 35 STATES HAVE A SALES TAX ON SODA. THESE TAX RATES VARY FROM STATE TO STATE, BUT NONE ARE HIGH ENOUGH TO AFFECT SODA BUYING HABITS. ADDITIONAL SALES TAX FOR SODA *Additional rates are percentage points added to the general 6.5 6.25 6 5.75 5.5 5.25 5 4.5 4 3 25 1 food tax rates for products. WILLSodaNNES SHAINK AMERICA'S WAISTLINE? CONSUMERS THOUGHTS: IS TAXING SODA A GOOD IDEA? 17.9% No, it won't make a difference for obesity. 24.2% No, it's a government cash-grab. 22.1% No, individual choice. 18.4% Yes, but range of solutions. 13.7% Yes, for revenue, for obesity not sure. 3.7% Yes, it's a valid way to tackle obesity. ------- - ----------. SODA CONSUMPTION: PER CAPITA CONSUMPTION OF SUGARY DRINKS HAS NEARLY TRIPLED IN THE LAST 30 YEARS, ACCOUNTING FOR ABOUT HALF THE TOTAL RISE IN CALORIE INTAKE OVER THAT PERIOD. A big reason Americans are drinking more soda is that it's much cheaper than it used to be. However, will a hike in taxes on soda change consumers' behavior? THE FACTS: 2/3 of Americans face some sort of tax on soda purchases; for 41%, the tax rate is higher than for other food items. - 3%. However, the average tax rate is low, at around so the public health effects are minimal. It has been proven that for soft drink taxes to have a noticeable effect on soda consumption sales tax rates would need to be above 20%. Researchers at the University of North Carolina studied the eating habits of more than 5,000 young adults over a period of 20 years and found that an 18% PRICE OR TAX INCREASE ON SODA would result in the decline of calories and a -5 LBS. 5 POUND ANNUAL WEIGHT LOSS. SOURCES: Economix.blogs.nytimes.com, 2010 I Sciencedaily.com, 2011 I Childrenshospitalblog.org, 2010 I Healthland.time.com, 2011 I Taxfoundation.org, 2009 I Usatoday.com, 2010 I TurboTax Statehealthfacts.org, 2010 I Boston.com, 2011 I University of North Carolina, 2010 Yale University Rudd Center for Food Policy and Obesity, 2010 Choose Easy.