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Can the Sugary Beverage Tax!

I live in Cook County, IL—one of the worst governed jurisdictions in the United States.   To close a budget deficit it has passed a law imposing a tax of one penny an ounce on drinks that added either sugar or artificial sweeteners. This law resembles that in Philadelphia and some other jurisdictions.  While its supporters claim that it is designed to fight diabetes and other diseases caused by excessive sugar intake, it cannot be justified on this basis and is a regressive  and arbitrary tax on soda pop. It illustrates the perils of funding the government with so-called sin taxes rather than broader based sales or income taxes and  is yet more evidence of need for political reformation of our County.

The most sophisticated justification for this tax is that it addresses an “internality.” An internality is a case where a person’s behavior imposes costs on this same person later in time and that person discounts these later costs too substantially.   But people can rationally choose to enjoy pleasures now even if they cause pains later. Determining the importance of our current state in comparison to our future state is an important aspect of personal liberty.

Perhaps some discount rates are so extreme that they can be considered irrational. The cost of putting on a seat belt is so small and the injuries from a potential car crash are so great that a law requiring seat belts is justified. But preferences for food and drink are not so easily evaluated, particularly when the likelihood of harm from drinking sodas depends on the rest of your diet. Drinking sodas certainly cannot be easily distinguished from other kinds of dietary choices, like eating red meat, that also may create statistical risks in the long term.

But the clinching argument against this law is that it imposes the tax even on drinks containing artificial sweeteners. Many medical groups, like that on heart health, believe that such drinks are better options. If Cook County were really interested in discouraging sugary drinks rather than funding its bloated bureaucracy they would not raise the tax on some of the closest substitutes.

And this tax is regressive. It is not only regressive because people of modest means pay a greater proportion of their income for food and drink. It is even more regressive because poorer people tend to drink more sodas than fancy bottled waters and Chablis.

Finally, this tax underscores the problem of governance by an entity like Cook County whose leaders are very obscure.  While most people can name the Mayor of Chicago and the Governor of Illinois, few could identify the President of Cook County. That makes it easier for the County to impose outrageous taxes.

Reader Discussion

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on September 21, 2017 at 16:58:08 pm

Well, good stuff. However, some medical wags a while back conducted a study that indicated that artificially sweetened drinks DID NOT reduce obesity as the body's reaction to the substitute actually increased their craving for such drinks and ultimately the total fluid intake was larger.

Then again, what do I know - I am content to drink 4-5 cans of Coke per day. BTW: I am the same weight as on my service discharge date some 40 years ago, albeit somewhat softer!

You are correct that this tax is nothing but a sneaky way to fund government excess and not at all concerned with the health of the citizenry. In Seattle, flavored coffee drinks were to be exempted from the tax. Gee, I wonder why - Howard Schultz care to answer.

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gabe
on September 21, 2017 at 18:07:39 pm

What you say is true, but why not beer, wine, and liquor? Alcohol turns to sugar in the body, with about the same risk as sugared beverages. Taxing alcohol would have the perceived benefit of reducing drunk driving. Yes, alcohol is already heavily taxed, but not for this reason. If this is a reason at all, it makes no sense not to apply it to all beverages, across the board. What scares me most is the concept of "sin taxes" at all, As John points out this could be applied in every aspect of life, tacitly removing our RIGHT to make our own decisions in how we live our lives.

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David F. Hammack
on September 22, 2017 at 03:31:56 am

“For, to repeat, wealth or fee paying has, in our view, no relation to voting qualifications; the right to vote is too precious, too fundamental to be so burdened or conditioned.”
-Harper v. Virginia Board of Elections (March 24, 1966)

Perhaps we should say

For, to repeat, wealth or fee paying has, in our view, no relation to eating, drinking or doing recreational-substances; the right to pursue one's happiness by pleasing one's personal tastes is too precious, too fundamental to be so burdened or conditioned by excise taxes.

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Duke Hellingtonne
on September 22, 2017 at 05:55:04 am

Finally, this tax underscores the problem of governance by an entity like Cook County whose leaders are very obscure. While most people can name the Mayor of Chicago and the Governor of Illinois, few could identify the President of Cook County. That makes it easier for the County to impose outrageous taxes.

Surely true. But that's not a problem unique to counties. I bet few people could name their school board president, or the president of their water shed district, or any of a number of taxing entities.

Indeed, I bet the number of people who could name the Mayor of Chicago is smaller than the number who could name the governor. Or the president.

So what remedy? Is McGinnis advocating consolidating governmental power in the hands of fewer individuals in order to ensure accountability? (People who advocate the Unitary Executive theory basically make this argument.)

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nobody.really
on September 22, 2017 at 06:19:46 am

So McGinnis lives in Cook County, "one of the worst governed jurisdictions in the United States," as evidenced by its regressive tax.

I wonder about McGinnis's acquaintance with the range of governed jurisdictions. I recall stories about Ferguson, Missouri. There, they financed their government by pulling over black motorists and fining them of any reason they could find, or no reason. It go so bad that people rioted.

Now, how many jurisdictions finance themselves with a tax on sweetened drinks, and how many finance themselves by exploiting poor motorists? I suspect there are a lot more Ferguson, MOs than Cook Counties in this world.

I don't mean to dispute any of McGinnis's claims about the harms of regressive taxation. I just mean to note that there are less benign forms of regressive taxation than a tax on sweetened drinks.

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nobody.really
on September 22, 2017 at 12:13:11 pm

Really - and where did McGinnis imply any such thing? Well, of course, he MUST have; after all, anyone right of NPR must support the Unitary Executive.

Blah, blah, blah! _Ha!

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gabeg
on September 22, 2017 at 12:17:32 pm

"I suspect there are a lot more Ferguson, MOs than Cook Counties in this world. "

I suspect that there are - and it has nothing to do with race as you subtly interject. Traffic cameras, the current "salvation" of many municipalities *ACCEPT* all comers - to my chagrin!

BTW: "Stories" = "data" in THIS case. I thought you did not accept stories or anecdotal evidence.

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gabe
on September 22, 2017 at 12:50:01 pm

In Illinois you can start with the Governor, then the dictator of Chicago that they call mayor also called Don Corleone, all the alderman's, and the high ranking officials in the CPS system and flushed them down the toilet bowl and we will not be missing a thing. They are destroying the county and city just like they did to Detroit. Vote democrat again for more taxes from these crooks and corrupt officials. This was a sugar tax??? Nope. Just another extortion. So they can live large. How many taxes have been imposed to the citizens of the city and the county since the mafia took over backed up by the Kenyan guy?? Wake up Chicago.

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Abelardo Aguilu
on September 22, 2017 at 15:02:27 pm

"While its supporters claim that it is designed to fight diabetes and other diseases caused by excessive sugar intake, it cannot be justified on this basis"

"New research by scientists at Beth Israel Deaconess Medical Center and Harvard Medical School, and sponsored by the National Institute of Diabetes and Digestive and Kidney Diseases, suggests that consuming too much dietary sugar could set off a process in the body that leads to prediabetes and type 2 diabetes."

https://www.cbsnews.com/news/sugar-can-too-much-cause-type-2-diabetes/

The better science points to a link.

McGinnis doesn't even play a doctor on the lnternet.

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Miss Creant
on September 22, 2017 at 15:09:33 pm

lf you guys are opposed to sin taxes, why don't you work for removing the most severe sin tax of all: laws against prostitution? Don't we have a right to make our own decisions?

"But prostitution is lMMORAL!!!" RW hypocrisy, on florid display.

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Miss Creant
on September 22, 2017 at 15:15:26 pm

The data was compiled by the DoJ, which properly convicted Ferguson of this. Texas has a lot of notorious "speed traps," where cops see an out-of-state license plate and make sh*t up. https://www.watchdog.org/news/texas-ranked-worst-in-speed-traps/article_f508fd28-b72e-5b16-80f2-8bbdaaee19fe.html

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Miss Creant
on September 22, 2017 at 19:23:29 pm

"McGinnis doesn’t even play a doctor on the lnternet."

He DOESN'T? But i suspect he has stayed at Holiday Inn Express - they do provide free breakfast with sugary drinks.

Jury may not be totally in on sugar as some studies within the last year claim that consumption of artificial sugars may also play a role - who knows - I'll just have another can of coke and a smoke - after MissC - whose morals are these anyway? -Ha!

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gabe
on September 23, 2017 at 19:36:50 pm

These regressive taxes often spout from predominately one party,progressive
cities dominated by tax and spend Democrats. For decades these ensconced politicians have had little or no competition come election day. They therefore can fleece the population year after year to further feather their own nests without the worry of losing their "jobs." With that said,in Philadelphia these regressive "sugar taxes" have had unintended consequences in that the soda distribution companies are laying off much of their delivery and warehouse employees therefore contributing to increased unemployment and,at the same time,many of Philadelphia's citizens are crossing over into nearby suburbs to not only purchase their soft drinks but also much of their weekly groceries thus causing a loss of business to Philadelphia's supermarkets and convenience stores. In the end,the amount of taxes projected by the "sugar tax" is far less than predicted. The taxes were earmarked for Philadelphia's school system but in the end any additional revenue will be squandered by that school system's bloated and corrupt bureaucracy and overpaid teacher's unions.

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libertarian jerry

Law & Liberty welcomes civil and lively discussion of its articles. Abusive comments will not be tolerated. We reserve the right to delete comments - or ban users - without notification or explanation.