Thursday, September 24, 2009

Quit Whining, Soft Drink Manufacturers. You've Been On the Government Dole for Too Long!

When you're out to buy a drink to go with take-out or fast food, the cheapest choice is always a Coke or a Pepsi or a Sprite. Plain bottled water usually costs more. A cup of coffee or a bottled tea costs more, and real juice, orange or apple for example, costs a lot more.

This fact should be at the heart of the growing debate about imposing a tax on sugared soft drinks rather than a false argument about individual freedom-of-choice or why Americans are getting so fat.

Advocates of the tax are focusing on the link between increased consumption of soft drinks and the rise in obesity. They say cheap soft drinks are helping to make us a nation of fattys, with all the bad health consequences that result from being obese. Placing a tax on soft drinks to raise the price, say proponents, will discourage consumption, and the money raised could be used to pay some of the cost of providing universal health care.

The opposition,led by the American Beverage Association, has framed its criticism as an objection to another form of government intrusion. It's recent quarter-page ad in The New York Times waved the flag of personal freedom:
  • "Our goal is to help Americans better understand the relationship between calories consumed and calories burned--as it should be their choice what to eat or drink and not the government's."
Before you swallow that appeal to your rights, consider that the government has had both feet planted in our food supply for decades.

Every year, for example, $10 billion of our taxes are handed out in subsidies to American corn farmers, which has had the effect since the effect of keeping corn prices below the cost of growing it. Our taxes then provide an indirect subsidy to soft-drink manufacturers in saving them about $243 million a year on high-fructose corn syrup, the sweetener used in almost all our soft drinks, according to a Tufts University study. (That study is called "Sweetening the Pot," and can be found at a Tufts' website with a series of fascinating reports on how U.S. government agriculture policies are affecting our food choices.)

That taxpayer-provided discount on the corn syrup is one reason--although not a big one-- for the low price of soft drinks; the cost of the syrup represents only 3.5% of the total cost of making a soft drink, according to the Tufts researchers.

Meanwhile, farmers who raise healthy food--fruits and vegetables--get no tax subsidies at all. That puts the healthiest food at a price disadvantage against all the food products, besides soft drinks, that benefit from the subsidies. Beneficiaries include the giant agribusinesses that concoct all manner of processed foods as well as beef, pork and chicken producers who feed corn to huge numbers of animals in confined and often cruel conditions.

Furthermore, we have a long tradition of using tax policies to push behavior in one direction or another, and whether you favor the push depends, quite naturally, on your self-interest rather than your conservative or liberal ideology.

You don't hear builders, for example, objecting to the tax deduction for mortgage interest that indirectly lowers the price of owning a house and puts renting at a disadvantage. Nor did General Motors object when Congress gave tax breaks to purchasers of Hummers.

So, the idea of using a tax to push consumers away from soft drinks is consistent with past policies. Making the drinks more expensive still leaves people free to buy and drink them, but might push some toward healthier choices.

And, the money that would be raised by the tax could be used not only to help pay for universal health care but also to provide support for vegetable and fruit farmers and help build regional food production networks.

So, beverage makers should quit their whining. It's time they had to face the competition without the advantage of subsidies from taxpayers, although ending the corn, soybean and wheat subsidies has proven politically impossible. But if free enterprise and free choice are really the beverage-makers' goal, then they should be lobbying for an end to the subsidies just as vigorously as they are opposing a tax on soft drinks.

But I won't be holding my breath waiting for that to happen.

What do you think?

No comments: