The Congressional Budget Office ([image-nocss] CBO) estimates that a three-cent tax would generate $24 billion over the next four years, according to the news outlet, and proponents of the tax argued before the committee that it would lower consumption of sugary drinks and improve Americans' overall health.
At the Centers for Disease Control & Prevention's "Weight of the Nation" conference on Monday, CDC chief Dr. Thomas Freiden said increasing the price of unhealthy foods "would be effective" at combating the nation's obesity problem, according to the report.
He said, "I think anything that increases the availability and decreases the relative price of healthy foods and anything that decreases the availability and increases the price of unhealthy foods is likely to be effective. The challenge, I think, is a political one of getting that approved as well as there are very important administrative and operational issues with implementation of such attacks. One of them that we were just discussing before the session, the importance of doing it in the right way. A tax that's done as an ad valorem tax, that is, a percentage tax, only pushes people to buy bigger, cheaper items. A tax that's a specific tax, that is, a tax per ounce or per gram of sugar pushes people to consume less of that item. I reiterate as I said in my remarks, this is not an administration position, but I'm giving the science behind as I did in an article in a medical journal a few months before."
He added, "There is clear evidence that there is a strong price elasticity to soda and that increasing the tax would significantly reduce consumption as well as generate quite substantial revenues. The estimates that we've seen suggest that a one penny per ounce tax nationally would raise something on the order of $100 billion to $200 billion over a 10-year time frame, as well as significantly reducing caloric intake at least from soda and sugar-sweetened beverages." (Click here for the complete transcript.)
Obesity-related health spending reaches $147 billion a year, double what it was nearly a decade ago, according to CBS News, citing a study published Monday by the journal Health Affairs. Given that evidence, the argument goes, a soda tax could plausibly pay for health care reform both by raising revenues and bringing down the medical expenses associated with obesity.
Those opposed to the soda tax, however, are emphasizing the impact it could have on poor Americans, the report said. The American Beverage Association has formed a coalition called Americans Against Food Taxes to oppose the soda tax. Made up of 110 organizations opposed to raising taxes on food and beverages to pay for health reform, the group is running an advertisement that shows a family enjoying soda on a camping trip. Given the current state of the economy, the ad says, "this is no time for Congress to be adding taxes on the simple pleasures we all enjoy."
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