Soda Tax Could Raise $10 Billion Per Year for Cash-Strapped States


Photo via the NY Times

A soda tax could close cash-strapped states' budget gaps, a new study finds. The report, authored by the Center for Science in the Public Interest, says that a mere 7 cent tax on sugary drinks could raise a combined $10 billion per yer. Soda may not be as downright deadly as tobacco products--a favorite taxable cash cow--but they're a large contributor to obesity and diabetes. Is it time for a soda tax? Well, that's a slightly misleading question, seeing as how 25 states already have soda taxes in some form. But many health experts think there should be more--or even such a tax at the federal level.

In theory, the benefit could be threefold: it'd be a major source of income for states that are in the midst of dire budget crunches--California alone could generate over $1 billion a year from taxing soda 7 cents for every 12 ounces. Secondly, it could decrease consumption of unhealthy soft drinks, potentially curbing childhood obesity and diabetes. Finally, by cutting down on such costly health issues, funding for care would be trimmed as well.

And this last point seems to have piqued none other than president Obama's interest: (via the LA Times)

"Every study that's been done about obesity shows that there is as high a correlation between increased soda consumption and obesity as just about anything else. Obviously it's not the only factor, but it is a major factor," the president said in a recent interview in Men's Health magazine.
Of course, beverage industry groups are steadfast in their disapproval of a soda tax of any kind--they claim it intrudes on personal choice. But health groups hit right back, saying that soda is "dirt cheap" which helps promote forming habits of drinking the hands-down unhealthy stuff. And the monetary benefits are tough to argue with. Don't believe me? Check out this soda tax revenue calculator to see how much dough such a tax could bring in for your city or state.

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Tags: California | United States

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