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Friday, August 14

Should We Tax Sodas and Junk Food to Pay for Health Care?

Mr. Johnson weighed nearly a ton.
And drank pop 'til his health came undone.
His kidneys turned blue
But he said, "I've got two."
"So I'll drink 'til I only lose one."

The debate over health care reform has run smack into a brick wall of economic reality. There's just not enough money to pay for all the disease in America, it seems, and now lawmakers are desperately searching for new sources that might bridge the financial gaps. Their latest scheme involves taxing sodas with a three-cent tax to raise an extra $24 billion over the next four years.

At first, taxing soda might seem like a good idea. Sodas, after all, promote diabetes, obesity, bone loss and many other costly health conditions. It only stands to reason that people who drink soda should pay a little more towards a national health care plan.

But there are problems with this idea of a soda tax. For starters, it's a highly regressive tax that ultimately gets paid mostly by low-income, low-education people (the kind of people who drink a lot of soda). It's a tax, in other words, on those who can least afford it.

Another problem with such a tax is that if the U.S. government is going to use taxes to modify consumer behavior, it would seem prudent to first end the government subsidies on sugar that have existed since World War II. Why are we still using taxpayer dollars to lower the price of sugar when refined white sugar contributes so much to our nation's health problems?

Then there's the question of where the money will go. Even if you slap a five-cent tax on every can of soda, does that money actually end up going towards improved health care, or is it just lost in the morass of bureaucratic incompetude that wanders the halls of Washington these days?

Case in point: The government settlement with Big Tobacco. All that tobacco money that was supposed to go to "improving health care" across America has actually ended up in the general budgets of most states, where it gets wasted on a thousand different things that have nothing to do with health care. A soda tax would likely end up being lost in the system in much the same way.

A better solution for influencing consumer behavior
Slapping new "sin taxes" on consumer products as a way to shape consumer behavior while raising money is a seductively attractive idea if you're a bureaucrat with an itchy trigger finger. It seems (at first, at least) economically and morally sound: Make the people who cause the problem pay more for fixing it. It all seems so simple: Let cigarette taxes pay for health care. Let soda taxes help fight obesity. Let alcohol taxes pay for alcohol addiction recovery centers. But in the real world, it never quite works that way: Money gets stolen away for other uses, rarely going to the intended beneficiary. Meanwhile, the taxes end up hurting those consumers who can least afford it.

A far better option is educating consumers about the harm these products cause. Put large, unambiguous warnings on cigarettes like, "SMOKING CAUSES CANCER" along with a horrifying picture of a diseased lung. On soda cans, you could require warnings like, "DRINKING SODA CAUSES KIDNEY STONES" along with a picture of a short, sweaty man holding his junk and screaming in pain. -naturalnews

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