B12 Solipsism

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Soda tax and Corn Subsidy

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There is talk of soda and other sugary drinks being publicly identified as being a culprit in our nation’s worsening health

Storing Corn - Agfa Scala 200

In their critics’ eyes, producers of sugar-sweetened drinks are acting a lot like the tobacco industry of old: marketing heavily to children, claiming their products are healthy or at worst benign, and lobbying to prevent change. The industry says there are critical differences: in moderate quantities soda isn’t harmful, nor is it addictive.

The problem is that at roughly 50 gallons per person per year, our consumption of soda, not to mention other sugar-sweetened beverages, is far from moderate, and appears to be an important factor in the rise in childhood obesity. This increase is at least partly responsible for a rise in what can no longer be called “adult onset” diabetes — because more and more children are now developing it.

[Click to continue reading Is Soda the New Tobacco? – NYTimes.com]

Dance of the Devil Corn

So what to do? Well, in the best Washington manner, the answer is to tax the offending party and hope this changes behavior:

A tax on soda was one option considered to help pay for health care reform (the Joint Committee on Taxation calculated that a 3-cent tax on each 12-ounce sugared soda would raise $51.6 billion over a decade), and President Obama told Men’s Health magazine last fall that such a tax is “an idea that we should be exploring. There’s no doubt that our kids drink way too much soda.”

Small excise taxes on soda are already in place in Arkansas, Tennessee, Virginia, Washington and West Virginia, and Chicago imposes a 3 percent retail tax on soft drinks. Soda taxes were proposed in at least 12 other states in 2009, though none were approved. Mississippi is considering legislation that would tax the syrup used to sweeten soda; the mayor of Philadelphia is weighing a tax on soda and other sugar-sweetened drinks, and Gov. David Paterson of New York has indicated that he will recommend a penny-per-ounce tax on sugared beverages in his 2011 budget.

The penny-per-ounce tax, favored by Dr. Brownell and others, would produce a significant increase in retail costs: the 12-pack of Coke on sale for $2.99 would go for $4.43 and a 75-cent can would rise to 87 cents. These increases, Dr. Brownell estimates, would reduce the annual per capita consumption of soda by more than 11 gallons, to 38.5 gallons. “And the revenue,” he says, “could be used to subsidize fruits and vegetables, fund obesity prevention programs for children and home economic classes in schools, and more.”

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A couple of points in response. One, I’ve heard the 50 gallons per person a year claim before. That’s a hell of a lot of soda. Especially when household’s like my own are considered. Even if you add in cocktail ingredients like tonic water, ginger ale and tomato juice, we probably drink ten 12 ounce containers, which is 1 gallon a year in our entire household. But the oft cited average is 500 12 ounce containers annually, or nearly 1.5 cans a day. That’s a lot, and of course, this is only the average person.

Two, Mark Bittman’s article doesn’t mention a topic that Michael Pollan and others have argued quite compellingly, namely that the US Government is complicit in soda remaining so cheap because of the Federal Farm Subsidies to high fructose corn syrup producers like ADM and Cargill. On the one hand, the government gives tax money to agribusinesses to grow corn, and on the other, the government taxes products like soda made with the byproduct. Of course, PepsiCo and other cpgs1 depend upon cheap ingredients as part of their business model, so they cannot talk too loudly about the injustice of it all.

Footnotes:
  1. consumer package goods []

Written by Seth Anderson

February 14th, 2010 at 9:55 am

2 Responses to 'Soda tax and Corn Subsidy'

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  1. […] as to why that is. Also, isn’t it nice that the federal government subsidizes high-fructose corn syrup, keeping its price artificially low? Low price means high fructose corn syrup is used as an […]

  2. i’d really like to see taxes like these in place, along with readjustment of subsidization of high fructose corn syrup. together this could not only significantly reduce sugar and soda consumption but also allow for this money to be spent in other places like, as Dr. Bronwell says, fruit and vegetable subsidization, providing healthier options at a lower price instead

    Geoff

    12 May 10 at 7:29 pm

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