Personally, I'm not for taxing sodas, but something should be done to make soda manufacturers be more truthful about the health effects of the contents of their products.
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How to Fight Back
By Daniela Perdomo, AlterNet
May 21, 2010
Scouring lobbyist filings is akin to looking into a public-policy crystal ball. What Big Business is spending on lobbying today will give you a good idea of what the next big policy fight will hinge upon.
Here's an example. In the first quarter of this year, a trade group representing the interests of non-alcoholic drink-makers called the American Beverage Association upped its lobbying expenditures by a whopping 3,785 percent over the last quarter of 2009. According to the Center for Responsive Politics, the ABA went from spending a paltry $140,000 to shelling out $5.4 million.
What are non-alcoholic beverage producers so afraid of? Two words:
soda taxes.
Last year, Congress seriously discussed including a tax on sodas and other calorie-laden beverages like energy and sports drinks (diet sodas were to be exempted) in the forthcoming health care overhaul in order to help cover costs for what was then supposed to be a universal health care plan. At the time, the Congressional Budget Office estimated that the proposed nationwide 3-cent tax on sodas would generate $24 billion over four years.
The ABA and affiliated moneyed interests successfully flexed their lobbying muscles and produced a $10 million nationwide ad campaign in order to extinguish talk of a federal soda tax. Such language never made it into the bill Congress eventually passed.
But the $110 billion-a-year sugary drink industry knows their fight isn't up yet. They surely have been spooked by President Obama saying that soda taxes are an "idea that we should be exploring." And the hawkers of sugary drinks are also aware that although they managed to derail a national tax -- for now -- local and state governments are taking up the battle Congress dropped.
The fight for our waistlines and purse strings is just heating up.
The American soda problem
It's hard to know where to begin discussion of how bad sodas are for you, given the myriad reasons and statistics, but Marion Nestle, a public health nutritionist and professor at New York University, has been writing about this public health nuisance for so long she does a pretty good job of it.
"They have no redeeming nutritional value and just add unnecessary calories to diets that already have too many," she told AlterNet.
Indeed, drinks like Coke, Gatorade, and curiously named drinks like Vitamin Water are essentially part sugar and part water, leading sweetened beverages to account for half of all sugar intake in the average contemporary American's diet. Sugar-infused drinks have long been a stalwart of U.S. culture -- Coca-Cola was born in 1886 -- but Americans drink them much more than ever before. And it's not hard to see there is a definite correlation between the obesity epidemic -- which costs us $147 billion a year -- and the explosion in soft drink consumption.
While the soda problem is apparent among Americans of all ages, youth are the most affected. After all, they've grown up on campaigns extolling "the Pepsi Generation." Studies show that beverages now account for 10 to 15 percent of all calories consumed by children and teens -- and for each extra can or glass of sugared beverage consumed per day, the chances of a child's becoming obese increases by a staggering 60 percent. The average 18-year-old today is less than an inch taller than the average 18-year-old back then, but is 15 pounds heavier.
Yet the immense marketing budgets behind Coca-Cola and PepsiCo aren't the only reason more and more people are drinking more of this stuff. The biggest problem is that soda has become outrageously affordable. A staggering analysis by the Bureau of Labor Statistics shows that the price of carbonated drinks has fallen 34 percent since the late 1970s, while healthy foods like fruits and vegetables cost over 30 percent more than they did before.
Lest you think you don't have a "soda problem," Gail Woodward-Lopez of the Center for Weight and Health at Berkeley has news for you. She says we shouldn't drink more than one -- yes, one -- sweetened beverage per week.
The damage these drinks do to your system is leading people to compare the beverage business to the tobacco industry. Of course the ABA is loathe to accept such analogies. In a recent NPR interview, the person in charge of the group's science policy said sweetened drinks are completely unlike cigarettes.
"Smoking kills people. There is no safe level of consumption. And soft drinks are an enjoyable, safe product that people have been enjoying for generations," Maureen Storey said, before blaming American obesity on our failure to exercise.
To be fair, soda didn't make us fat all on its own -- and we do need to exercise a lot more. But given how much we drink these beverages, and how much of the nutritionally void sugar we ingest is derived from them, soda has become a problem we're only now in hindsight realizing has damaged the health of an entire generation. Kind of like cigarettes.
How to tax it
The average state tax on a pack of cigarettes sold in the United States is $1.42; there is also a $1.01 federal tax. These extra costs have led to a decrease in cigarette consumption, particularly by price-sensitive demographics like young people, and brought millions in revenue to every state. Given the success of these measures, it's little wonder that a sin tax on sodas is so appealing to health advocates.
A New England Journal of Medicine study from last year, which made the public-policy case for soda taxes, opened with a quote from Adam Smith's 1776 Wealth of Nations: "Sugar, rum, and tobacco are commodities which are nowhere necessaries of life, which are [sic] become objects of almost universal consumption, and which are therefore extremely proper subjects of taxation."
So to say the least, the idea of taxing sodas isn't really new. Currently, 33 states have a sales tax on soft drinks sold at grocery stores and in vending machines, with rates ranging from 1.3 percent in Montana to 7 percent in Rhode Island and Mississippi. Six other states have a sales tax on those sold in vending machines only. And finally, six states have instituted an excise tax in addition to the sales tax. Examples would be Rhode Island, which charges 4 cents per each case of beverage, and Arkansas, which taxes 21 cents per gallon and $2 per gallon of syrup.
The problem here, according to soda tax supporters like Julie Greenstein of the Center for Science in the Public Interest, is that the sales and excise taxes out there are too small to affect consumption rates -- and the revenues coming in from these taxes are not being directed to programs that would help prevent and treat obesity. (Half of the money we spend on obesity is paid for by taxpayers via Medicaid and Medicare.)
Greenstein's organization is pushing for a tax of 7 cents per 12-ounce can of soda, which is estimated to bring in $10 billion per year. An April study published in the Archives of Internal Medicine says that if the price of sweetened beverages increased by 18 percent, people would consume an average of 56 fewer calories a day and lose about five pounds a year.
But some want to go even further, levying a tax of 1 cent per ounce. If this was done nationally, the revenue would be $14.9 billion in the first year alone.
There is a measure on the table in Washington, D.C. that would charge a penny per ounce, raising the price of a typical 12-pack of cans by 30 percent. The revenue would be used to pay for the newly passed Health Schools Act, which would improve the quality of lunches in the area's public schools. The D.C. city council will vote on this on May 25, but observers aren't sure it will pass.
Current and past efforts
In addition to the foiled federal tax last year, the industry has been aggressive in pushing back efforts elsewhere. The governor of New York proposed an 18 percent tax on sugar-rich drinks, and was beat down by the state legislature last year, but on Thursday announced a new -- and less stringent -- proposal to raise $815 million in annual soda taxes. The industry was also successful in influencing a vote in Philadelphia, although debate continues. A measure has been introduced in the California state senate, but prospects look slim there, too. Unfortunately, absolutely no moves are being made on the federal level right now.
"The industry is spending millions and millions of dollars. Every time you turn on the radio, there's a Big Soda ad against these proposals," Greenstein says. "They're lobbying hard. They're outspending us."
Perhaps you remember a striking ad by Americans Against Food Taxes last year -- at the height of the federal soda tax debate -- which showed a mother unloading groceries from her car. Proponents "say it's only pennies. Well, those pennies ad up when you're trying to feed a family," we're told. Of course, the visceral ad doesn't ask whether poor people who are struggling to feed their families should really be spending money on incredibly unhealthy food that will rack up medical bills, but then again why would it? Americans Against Food Taxes is a front group funded by the beverage industry.
More recently, as the New York City Health Department has unfurled a graphic campaign against sodas taglined "Don't Drink Yourself Fat," the Center for Consumer Freedom -- front group number-two -- has plastered the city with ads that ask: "Big Apple or Big Brother?"
While Greenstein would have to hope against hope that any of the current efforts to pass effective soda taxes will be successful, she is actually buoyed by the industry's response. "The fact that they're spending so much is proof that if these proposals passed, they would be effective," she says. "They wouldn't be out here lobbying so hard against them otherwise. We'll keep pushing and if it's not this year then we'll be back again the next."
The fight will be framed (and reframed)
To be sure, the tremendous spike in dollars being spent by the beverage industry in order to counteract the bad press and to de-legitimize the arguments for soda taxes is proof-positive that the makers of these unhealthy drinks know these measures would be quite effective in reducing consumption and changing habits.
Last year, Coca-Cola trotted out its chief executive, Muhtar Kent, to pen an editorial for the Wall Street Journal defensively titled "Coke Didn't Make America Fat," in which he argued that exercise was the solution to our fat problems. This argument is easily trumped by pointing to seatbelt legislation. Not wearing a seatbelt doesn't solve all the risks related to driving in a car, but it can greatly diminish them. In the same way, cutting a nutritionally void drink out of our lives will aid us in the general path of a healthy life -- along with increased exercise.
The ABA constantly trumpets the idea that soda taxes are regressive, because they would disproportionately affect poor people. But this is handily disputed. Sugar-sweetened drinks have no nutritional value and healthy alternatives like, say, water are free or much cheaper. So a tax that shifted consumption from soda and other sugary beverages to water would not only improve health and lower costs for cash-strapped families, it would also raise revenue for programs that promote healthy eating, obesity prevention and health care for those most in need.
The industry will also keep on saying that these taxes won't actually affect consumption, they'd simply be ineffective from the get-go. But this is true, as a recently released RAND study shows, only when the taxes are small -- and Big Soda knows it. A trade publication, Beverage Digest, ran a report in 2008 showing that if soft drink prices rose 6.8 percent, sales dropped 7.8 percent; and more specifically: if Coca-Cola prices increased by 12 percent, sales would drop by 14.6 percent.
While money and power may be on the sugar-pushing beverage industry's side for now, the momentum is ultimately with the proponents of soda taxes. Support for food taxes continues to rise -- especially when people are told revenues would go to obesity prevention -- and growing public awareness about nutrition and health is fueling the attempts to pass truly effective soda taxes throughout the country.
In the meantime, get off the Internet, reach for a glass of water and go for a run.
