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Fat Taxes Are the Wrong Prescription

4 min readBy: Patrick Fleenor, Andrew Chamberlain

At the American Medical Association’s meeting in Las Vegas this weekend, there’s one item on the agenda Americans should reject: “fat taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. es” aimed at slimming down the nation’s waistlines.

Abandoning common-sense advice like dieting and exercise to curb obesity, the famous doctors’ group is now aiming to pressure federal, state and local lawmakers to pass new taxes on sweetened beverages, including regular carbonated soda like Coke, sports drinks like Gatorade, and most sugar-sweetened juices.

The AMA’s tax targets are sucrose, fructose, dextrose, glucose and of course, the menace of old-fashioned table sugar. To wage this battle, the group is assembling a coalition of the willing-to-tax—most notably the nanny group Center for Science in the Public Interest, famous for its war against movie theater popcorn.

Lousy Politics
Everywhere these so-called fat taxes, soda taxA soda tax is an excise tax on sugary drinks. Most soda taxes apply a flat rate per ounce of a sugar-sweetened beverage. es or snack taxes have been tried, voters have rejected them. As you might expect, California pioneered them, but its 1992 snack tax lasted less than a year. Not only did the citizens repeal it in a referendum, they even barred the state legislature from enacting similar taxes in the future.

Since 1990, soda taxes in six other states and three cities have met a similar fate thanks to widespread voter opposition. And every state that has ever imposed a broadly defined “fat tax” on snack foods has repealed it. The message is clear: Voters don’t want a tax code that micromanages eating habits.

And it’s not just voters. According to a 2003 Harvard University survey, 59 percent of U.S. adults oppose special taxes on junk food like soda, chips and candy.

The AMA tries to downplay its new taxing approach by promising that it’s not really trying to tell Americans what to drink. It’s just trying to “raise money for much-needed obesity prevention efforts,” according to the group’s officials.

But don’t be fooled. The nation has seen this bait-and-switch before from those who favor more expansive government programs but aren’t willing to be honest and raise real taxes to do it.

Almost forgotten today is that the federal income tax began this way. Initially sold to the public as a small surtaxA surtax is an additional tax levied on top of an already existing business or individual tax and can have a flat or progressive rate structure. Surtaxes are typically enacted to fund a specific program or initiative, whereas revenue from broader-based taxes, like the individual income tax, typically cover a multitude of programs and services. on the very wealthy, it quickly enveloped all Americans. Today, more than 130 million Americans file federal income tax returns. And still the federal government spends every dime and more, regularly running deficits.

In the 1950s, the federal government created the Highway Trust Fund and promised that its 3-cent per gallon gas taxA gas tax is commonly used to describe the variety of taxes levied on gasoline at both the federal and state levels, to provide funds for highway repair and maintenance, as well as for other government infrastructure projects. These taxes are levied in a few ways, including per-gallon excise taxes, excise taxes imposed on wholesalers, and general sales taxes that apply to the purchase of gasoline. would be devoted entirely to road construction and maintenance. Today, the tax is more than six times higher, and funds everything from museums to graffiti removal, and even the notorious recent Alaskan boondoggle, the so-called “Bridge to Nowhere.”

The AMA’s soda tax would start out small. But at a nickel per beverage, its programs would undoubtedly soon be described as “underfunded.” And once the soda obesity tax has burrowed its way into law, there’s no limit to how high cash-hungry lawmakers will push the tax rate.

Poor Policy
Soda taxes are also bad policy for the simple reason that soda by itself isn’t making us fat. According to the U.S. Department of Agriculture, regular soda consumption has been falling every year since 1998, while at the same time Americans have been getting fatter.

In 2004, we actually drank less soda per person than in 1995, long before obesity was making headlines.

This is no surprise. Soda isn’t the only drink with calories. As reported in a “CBS HealthWatch” story last year, fruit juice routinely has more calories than soda: A 12-ounce bottle of grape soda has 159 calories, while the same bottle of unsweetened grape juice weighs in at 228. Why single out sweetened beverages or soda?

Taxes are an important part of society. They raise revenue for essential government services. Gimmicks like the AMA’s soda “fat tax” make a mockery of that system, turning the tax code into a playground for lawmakers’ and doctors’ paternalistic lifestyle views rather than a tool for funding programs.

The doctor’s adage of “first do no harm” should apply to taxpayers’ wallets as well. Tell the AMA’s doctors to stick to medicine, and leave the tax system to our legislators.