Should Soft Drinks Be Taxed To Pay For Health Care Reform?
Finance | September 22, 2009 at 1:08 amChairman Baucus of the Senate Finance Committee is bent on making health care reform mandatory. Obviously there’ll be people amongst us who’ll not find it easy for paying up the premiums of the health insurance. If you don’t, you’ll have to pay a penalty. A middle class citizen might have to pay a penalty of $3,800 for not taking the health care insurance. Of course the government has thought out different ways to help even the common man to avail the insurance like the establishment of lending cooperatives that will help you in paying up your premiums and also in getting medical care and resources at subsidized rates. But these facilities can always be appended with other ways so that availing that mandatory bill is not that pinching on your bank accounts after all.
As I was going through financial news this morning I came across Barb Shelly’s question “Why isn’t a tax on soft drinks getting more attention as a way to pay for health care reform?” on Midwest Voices. Of course, that’s very true! We love soft drinks and the younger generation cannot simply live without their favorite soda. Soft drinks are consumed by a huge percentage of the population. Even if you don’t drink coke, you might, of course be drinking diet coke! So when the government levies taxes on soft drinks, it’s expected to generate huge revenues which can actually help in paying up for the health care reform. I think other than soft drinks this can work with fast food, hard drinks, cigarettes, cosmetics clothes and other lifestyle goods. But you’ve got to some thinking on the flip side as well.
Soft drinks do us no good, yet we are very fond of them. These items along with cosmetics and luxury items can be taxed well, so that health care reform bill can be paid for. As far as soda or any health drink is concerned, they are not very good for our health and taxes on these will restrict their consumption. So, you are doubly benefited. Your health improves when you get out that soft drinks addiction and also you get good health care by being insured by the health care reform.
Michael Pollen opines in New York Times opines “the government is putting itself in the uncomfortable position of subsidizing both the costs of treating Type 2 diabetes and the consumption of high-fructose corn syrup.” So is there a better way of achieving this dual goal other than by levying taxes on soft drinks? I feel apart from soft drinks, addictive hard drinks and cigarettes should also be taxed so that people get healthier. This will work because being hit 
badly by the recession, who’ll want to spend that extra money on these drinks and addictions that are no good at all?
But if a tax is levied to raise revenue and increasing taxes will only make us shun the item then can it really generate the huge amounts of revenue to pay up for the health care bill ? I don’t think so.
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I don’t think taxing soft drinks will help. People will simply leave drinks. That will help in improving health.
While some may feel that their personal freedoms are being tread upon through the introduction of a tax on soft drinks and other products that damage health, the reality is that governments exist to formulate policy that provide direction to citizens. A tax on soft drinks would provide some economic benefits, but more importantly, it would reduce consumption of the soda by some amount and the benefit of this would be some reduction in health care costs. The overall benefit is hard to quantify, but just like charging people for plastic bags, it does provide some stimulus for people to change their behavior.
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