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The Truth about Trade

RSS By: Dean Kleckner, AgWeb.com

Dean is Chairman Emeritus of 'Truth About Trade & Technology, a nonprofit advocacy group led by a volunteer board of American farmers.

Soda Pop Tax: "The Sell By Date" has Passed

Nov 11, 2010

 

By Bill Horan – Rockwell City, IA (www.truthabouttrade.org)
 
The soft-drink tax is a bad idea whose time has come--and gone.
 
Last week, voters in the state of Washington spurned a plan to impose a special tax on soda pop. Consumers spoke loudly and clearly.  An overwhelming majority of 62 percent rejected the scheme. 
 
The more people thought about it, the more the whole concept began to taste like a can of Coke that had been cracked open and left on the counter all night.
 
In other words, the soda-pop tax fizzed out.
 
As a political issue, it’s dead. Legislators and candidates who try to recycle the soda-pop tax will find themselves crushed like aluminum cans beneath the heels of irritated voters.
 
This was by no means inevitable. A year ago, a soda-pop tax was at the height of political fashion. Even President Obama talked it up. “I actually think it’s an idea that we should be exploring,” he said in an interview. “There’s no doubt that our kids drink way too much soda.”
 
They do?
 
That’s an opinion. I suppose that some kids really do chug too many Big Gulps. Others probably sip soda in moderation and many avoid the stuff entirely. The same goes for adults.
 
This is one of the consequences of freedom: Americans will choose to behave in a variety of ways. This includes their selection of food and drink. They don’t want or need interference from politicians who think higher taxes somehow will deliver smaller pant sizes.
Voters in Washington made this plain on November 2 when they approved Initiative 1107 by such a big margin.
 
Earlier this year, their state legislators in Olympia passed a package of tax hikes. The centerpiece was a tax of two cents per 12 ounces of carbonated beverage. There was also a tax on bottled water, taxes on certain kinds of food processing, and a complicated tax on candy that only a paper-pushing bureaucrat could love. It performed bizarre exercises such as distinguishing between marshmallows (taxable) and marshmallow cream (not taxable).
 
Some of these taxes were billed as “temporary.” Yet as Nobel laureate Milton Friedman once warned, there’s nothing as permanent as a temporary government program. The same politicians who want to dictate our food and drink choices never seem to put government itself on a diet. So we’re wise to view “temporary” tax increases with a super-sized dose of skepticism.
 
Two motives lay behind the tax hikes in Washington. The first was a desire to create a new source of funds for government spending. The second was a hope that driving up the cost of certain kinds of food and beverages will influence the choices consumers make when they roam the aisles of grocery stores or sit down at restaurant tables.
 
In a sense, the politicians behind the tax hike wanted to reclassify soda pop, treat it like alcohol and cigarettes, and slap it with a “sin tax.” One of the supporters of this approach is David Zinczenko, the editor of Men’s Health magazine, whose goal apparently is to treat corn-growing family farmers like drug pushers. “It’s time to fight back against the corn peddlers who are making our children fat,” he wrote last year.
 
From Seattle to Spokane, citizens in Washington were upset by this strategy, so they decided to file a popular referendum. They collected hundreds of thousands of signatures, qualified for the ballot, and carried a heavy majority on Election Day. Technically, voters approved I-1107, which tossed the soda-pop tax and its ilk onto the political trash heap.
 
No matter how you slice it, Americans of all persuasions would prefer not to have their soft drinks slapped with special taxes. Maybe the experience of I-1107 will convince politicians in other states to quit trying.
 
So the next time you sip your favorite fizzy drink, put a smile on your face--and thank the voters of Washington for what they’ve just done.
 
Bill Horan grows corn, soybeans and grains in Northwest Iowa. This fourth generation family farm has been involved in specialty crop production and identity preservation for over 20 years. Mr. Horan volunteers as a Truth About Trade & Technology Board member. www.truthabouttrade.org
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