States consider taxing sodas

WASHINGTON – After effectively quashing discussion of a federal tax on soft drinks last year, Coca-Cola, Pepsi and the fast-food industry are facing a new battle on the state level, where legislators are beginning to consider their own taxes on sweetened beverages to improve public health and generate revenue.

The next showdown could be in California, where legislators last week vowed to pass such a tax in light of new studies linking soft drink consumption to obesity in children and adults. One study suggests that obesity and related problems cost California alone $41 billion a year in medical expenses and reduced productivity.

In the past year, proposals to alter the tax treatment of soft drinks have surfaced in 12 states, including a bill that recently passed the Colorado legislature. The city of Chicago currently taxes soft drink sales.

In Washington, the industry spent $54 million on lobbying and millions more in campaign donations to key officials, effectively derailing any discussion of taxing soft drinks as a means of funding the federal health-care overhaul. The industry also partnered with community groups — including several in the president’s hometown of Chicago — to oppose a federal tax.

But the industry’s strategy has begun to fray around the edges. Some of the community and minority groups that partnered with the soda lobby last year are under pressure from state groups to sever their ties to the beverage industry.

After news reports on the industry’s efforts to recruit activist minority groups to its ”anti-tax’ campaign, one of the most prominent organizations — the National Hispanic Medical Association — dropped its alliance with the industry.

The California affiliates of two other groups have split from their parent organizations and are considering support for taxes on sweetened soft drinks.

Nonetheless, Kevin Keane, a senior vice president for the American Beverage Association, called the tax idea a ”money grab” that will hurt working families.

Share

Related Stories