Obama Supports "Sin" Tax on Coca-Cola and Pepsi
Sept. 8 (Bloomberg) -- President Barack Obama said he is willing to
consider taxing soda and other sugary drinks as Congress debates overhauling
the U.S. health-care system.
"I actually think it's an idea that we should be exploring," Obama
said in an interview with Men's Health magazine that goes on sale
next week. "There's no doubt that our kids drink way too much soda."
Lawmakers drafting legislation to revamp the U.S. health- care system
have considered new taxes on sugar and sweetened soda to help pay
the cost, estimated at as much as $1 trillion over the next decade.
Obama said that while the proposal faces opposition from some legislators,
higher taxes that reduce soda consumption would be helpful in holding
down health-care costs.
"Every study that's been done about obesity shows that there is a
high correlation between soda consumption and obesity," Obama said
in the magazine interview. "Obviously it's not the only factor, but
it is a major factor."
Trade association lobbyists working for companies including Coca-Cola
Co., PepsiCo Inc., Cargill Inc. and Archer Daniels Midland Co. have
worked to kill the proposal, which has been debated by the Senate
The American Beverage Association, a Washington lobbying group for
Atlanta-based Coca-Cola, Purchase, New York-based PepsiCo and other
non-alcoholic beverage makers, plans to continue to fight efforts
to levy soda taxes, spokesman Kevin Keane said.
"A vast majority of Americans have heartburn when the government uses
the tax code to tell them what to consume," Keane said. "We're going
to remain vigilant."
The Corn Refiners Association, a Washington lobbying group for companies
including Minneapolis-based Cargill and Decatur, Illinois-based Archer
Daniels Midland, didn't immediately respond to a request for comment.
The five-member S&P 500 Soft Drinks Index rose 1.1 percent today.
The index is up 12.3 percent since the beginning of the year.
Obama said he understands fears that some would have about "Big Brother
telling them what to eat or drink." Still, he said, any steps that
reduce soda consumption would have "a big impact on people's health
in this country."
Government moves discouraging soft-drink use would hit companies already
suffering from sliding sales and prices. Soft- drink sales volume
fell 3 percent in 2008, dropping for the fourth straight year, according
to Beverage Digest, an industry newsletter.
The Congressional Budget Office has estimated that a 3-cent tax on
12-ounce cans of soda would raise $50 billion over a decade.
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