It might surprise some people to know the American Medical Association (AMA) and the American Beverage Association (ABA) both oppose a targeted tax on soda, which is said to be the top source of calories in the American diet, accounting for about 7 percent of calories consumed, according to the AMA.
Putting aside public-health issues like child obesity and diabetes (which most reasonable people would agree are bad things), the politics of taxing sugar the way government taxes tobacco and alcohol seem to be a far more equivocal concept. While doctors agree the consumption of processed sugar and particularly soda is a significant public-health issue, they do not necessarily agree that taxation is the most effective tool for dealing with it. (The cynical view holds that the AMA is a big, powerful institution and operates mostly like all big, powerful institutions: in the interests of power and wealth rather than the well-being of individuals.)
State Initiative 1107, which sought to repeal the state sales tax on candy and bottled water as well as the excise tax on soda, appears to have passed by a landslide. The initiative also will reduce a nominal business and occupation tax (less than half of 1 percent) on processors of certain kinds of canned food.
The taxes on bottled water and soda were only temporary taxes, but the ABA (a national lobbying organization that represents the soft drink industry) still saw fit to pump $14 million into the campaign to defeat the measure. That's an astonishing sum of money for a state initiative, which shows you just how important the issue is for Big Soda, which would like to halt the spread of similar taxes in other states. To date, 33 states have a soda tax.
Perhaps because sympathy for soda is not easy to foster, supporters of the initiative tried (apparently with success) to characterize the issue as a grocery tax, planting the idea that today’s tax on bottled water, soda, candy, and canned chili is tomorrow’s tax on bread and milk and apples.
The temptation for voters to eliminate or reduce taxes is always high during a recession, which is perhaps why the initiative to institute a state income tax for high earners also failed by a landslide. None of this bodes well for state and municipal budgets, which are all underwater and must now accommodate the loss of even more income. The taxes that Initiative 1107 has repealed were estimated to be worth at least $200 million and as much as $300 million in government revenue over the next two years.
Interestingly, the two liquor initiatives appear to have failed, which is good news for the state and bad news for large retailers. Voters chose to keep the liquor business under government control even if meant giving up potentially lower prices.
It's debatable whether soda and candy are as much a luxury or a vice as liquor, but clearly a lot more of us (regardless of our age, gender, or persuasion) enjoy a Coke or a Snickers bar more often than a shot of Bourbon.