“Fat Tax” On the Scene Again – This Time, In the Senate

Argh. Can our debate on health care and taxes get any worse at this point?

After New York tried – and failed – to tax sugary soft drinks as part of a so-called “fat tax”, you’d think the matter would be put to rest. But that’s far from how our Senate works. If it doesn’t work, let’s, er, try it?

It should come as no surprise, then, that the Wall Street Journal is reporting that the Senate is considering such a tax at the national level to help pay for health care reform. You’ve got to be kidding.

First of all, I believe that we need health care reform. No child, no family should be without proper medical services in the richest country in the world. I don’t think we do it through taxes. How about, oh, I don’t know, revoking the tax exempt status of insurers instead? But I digress.

The party line is that a tax on these beverages might suppress usage and suddenly make us all incredibly healthy. But really, what makes sugary sodas any worse than chocolate? Or potato chips? Or any of that fairly questionable food that you can get at a fast food restaurant?

And it’s not just soda that might be taxed. The Senate is considering proposals to tax all “sugary beverages” which would include traditional sodas like Coca Cola but also drinks like Gatorade and Capri Sun.

You and I know that it’s all about money. The Congressional Budget Office estimates that a tax on these drinks could raise about $24 billion over four years. A lot of money. But only a drop in the giant bucket that is our deficit.

Of course, the American Beverage Association is fighting the proposed tax. Studies have shown that increasing the tax will likely decrease consumption – something that the industry doesn’t want. It’s a fairly powerful lobby so passing such a tax won’t be a small feat.

And I’ll come clean: I don’t drink sugary drinks. I’m a coffee (black, no cream, what are you – nuts?) and Diet Coke kind of girl. My kids do not drink soft drinks of any kind or Kool Aid. They drink milk, water and juice (yes, sugary but not added sugar). So such a tax wouldn’t affect me. But man, is it a slippery slope. When does the Senate decide that taxing sugary soft drinks aren’t enough? When do we slap a national tax on coffee or orange juice? Or milk?

Tax has always been used to modify behavior (think about why you own your home, rather than rent). But these days, it feels like it’s going too far. What do you think?

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15 thoughts on ““Fat Tax” On the Scene Again – This Time, In the Senate

  1. “How about, oh, I don’t know, revoking the tax exempt status of insurers instead?”

    Insurers are tax exempt? Can you clarify? Which insurers? What taxes?

  2. For years, insurers like Blue Cross were full tax exempt. That changed in the late 1980s but those companies still enjoy tax benefits not extended to other “for profits.” Good link here: http://www.consumersunion.org/conv/nonprofit_health_inc/tax_status/blue_cross/index.html

    Some insurers are making HUGE profits as nonprofits, such as in my own state of PA with the so-called “Pennsylvania Blues.” More info here: http://www.physiciansnews.com/spotlight/204.html

    Google around for info on insurance in your state.

  3. I don’t want National Healthcare–I don’t want some idiot bureaucrat who has a job by affirmative action put in charge of healthcare for my family–The government was not intended to be our babysitters. If those who act responsibly in their lives need healthcare there should be a platform made available to them to obtain it–but those in this country who are along for a free ride on everybody else should not depend on the government (who by the way are paid by us citizens) to provide them with any free gift of anything –including healthcare. If loafers have children –they should be held accountable for their–not those of us who act responsibly.

  4. When someone who wants national health care gets elected, what did everyone think would pay for it? Sugar Plum Fairies? LOL

    I just love that it is referred to as a fat tax. If you protest the fat tax people can say, “You want all those poor fatties sucking down soda after soda and dying of heart disease, diabetes, or both? Something should be done, don’t you agree?” It’s ALMOST as good as the “We’re doing it for the children…” excuse.

    Really, it’s genius.

  5. If sin taxes (that’s what this really is) actually did what people said they created them for, how would all these great programs that are funded by them, continue to operate?
    The costs of running a government should be shared by all the people yet those that benefit the most pay very little. Any new taxes should be levied on all Americans and the government should get out of the tax discrimination business.
    The main reason health care costs have skyrocketed out of control is because the free market has been driven out. Everyone expects the insurance to pay for everything and instead of paying cash to get little Jonny his sports physical, people expect it to be covered. Instead of paying cash to see your family doctor for a routine visit, people expect insurance to pay for it. Every little thing is expected to be paid for. It is the vicous cycle of: ” I pay so much for insurance that they should pay for everything,” and the insurance companies: “if our customers want us to pay for everything, we have to keep raising our rates.”
    If we could get back to a system where basic medical care was paid for by the patient, people would seek out the best care for the dollar and start to consider the costs of their care. Right now, people don’t consider costs and thus, health care costs are going up exponentially. This will continue to be the case in a single payer system.

  6. I have to agree with garagefather here. When I had medical insurance, I was told where I had to go for tests, and, believe me, they were not the least expensive providers. After the premiums went up to where I couldn’t afford insurance, I found high-quality sites for things like CT scans and chest X-rays when my doctor asked for them. I also used my lack of insurance to persuade my doctors to push my visits back from once every three months to once every six months (they didn’t want to hear that before). Now, I get cash discounts from doctors, cheaper tests, and enough money left over to sock some away every month in a high-interest savings account earmarked for a (God forbid!) hospital stay. However, I also know I’m about one major illness away from a financial wipe-out.

    Major medical insurance should be just that — insurance against a major illness. Nowadays, when even someone who’s had a stent put in can find themselves in my premium bracket, we need to re-think what insurance is supposed to do. We used to call it “hospitalization.” Try to find that now — especially if you’ve got a stent. If we put some common sense back into the equation, perhaps I could get some insurance . . .

  7. I’m of mixed mind on this. On one hand, I find it ludicrous that the government uses these tax programs to dictate what we should be putting in our bodies. On the other — super sugary, HFCS drinks are clearly not healthy for us, and soft drink companies have done little to clean up their end. Insurers are also raising premiums for people who have a high BMI – when BMI is a very poor measure or indicator of an individual’s health.Who do we hoist the responsibility on, the beverage company, or the consumer? And at what point does the government have the right to intrude on my health, deciding what weight, what foods, and what levels of exercise are best for my body at any given time?

  8. The government should stay out of our lives–The American people should be able to educate themselves about the risk of sugary drinks for themselves and their children. The “fat tax” is just another way of sucking money out of our pockets while proclaiming they are “guardians” of our health. If the government was so concerned about our personal welfare they would not promote lotteries and gambling that produce more crime –domestic disputes–etc. . Why are the American peopled duped by these Social Engineering schemes forged in with taxes. We are taxed right and left and we are going to leave our children with huge masses of debt they will never recover from. Politicians are dangerous –especially when we give them license to be!

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