Forget Tea Parties; Prepare for the Boston Coke Party!

An article in today’s New York Times Business Section reveals a lot about the relationship between the Left and taxation.

Sodas a Tempting Tax Target

[O]ne of the nation’s top public health officials is now a fierce proponent of a soda tax. Meanwhile, other Obama advisers and some Senate staff members have been talking about such a tax — which wouldn’t apply to diet soda or real juice — as a way to help pay for expanded health insurance. Among 15 options for paying for health care reform, a new Senate Finance Committee analysis lists a “sugar-sweetened beverage excise tax.” …
Whatever happens, the debate over soda tax is a useful one, because it does a nice job of capturing some of the most serious problems with our current tax system. Not only has the system been failing to collect enough revenue to cover government expenses, but it is also complex in all the wrong ways.

First burgers and fries, now sodas. And, relative to the [emphasis added] bold language above, has anybody considered the possibility that the failure lies in government’s inability to live within its means? Apparently, the thought has not occurred to anyone at the Times. Big surprise.

More twisted logic:

The tax code has layer upon layer of subsidies, deductions, exemptions and extra taxes that serve no good purpose. There is a huge exemption for employer-provided insurance, which has numbed us to the crushing cost of health care and is deeply unfair to people who must buy insurance on their own. There are hotel taxes, because it’s politically easy to tax out-of-towners. And there are taxes that seem to defy all reason, like New Jersey’s tax on health club memberships. [But wait, don't hotel and health club taxes fall upon those most able to pay? Sorry, there goes that consistency bugaboo again. - ed.]

On the other hand, activities that really deserve to be taxed — activities that place a cost on the rest of society — often go untaxed or undertaxed. Economists refer to taxes on such activities as Pigovian taxes, after the 20th-century English economist Arthur Cecil Pigou who advocated them.

Pigovian taxes have the double advantage of discouraging costly activities and helping to cover the costs that remain. Tobacco taxes have become the shining example. Yet alcohol taxes have fallen 35 percent since the early 1990s, adjusted for inflation. We still don’t have a carbon tax or its cousin, a cap-and-trade system. Nor do we have a tax on excess calories.

And will we tax high calorie fruit juices, like cranberry juice and grape juice? More drivel ensues.

[E]conomic research has found that soda drinkers are price sensitive. In the past, when the price of soda has risen by 10 percent, consumption has dropped by an average of roughly 8 percent. This means a soda tax may not be quite as regressive as it sounds, because poor people would end up buying less soda than they now do.

It’s certainly true that a soda tax, by itself, won’t solve the multibillion-dollar obesity problem. A true Pigovian approach would be much broader. It would get rid of the current government subsidies for corn syrup — and that New Jersey gym tax. It would use taxes and subsidies to reverse the long-term decline in the price of junk food and the long-term rise in the price of fruits and vegetables. Some economists say health insurance premiums should be lower for people who keep fit.

Wait! I have an idea! Since we’re all in agreement that obesity has as much to do with physical inactivity as it does with caloric intake, how about an Oprah Tax, to discourage sitting on the couch watching daytime TV?

And to top it all off, the Times article closes with this gem:

…“It’s a simple equation — calories in, calories out.”

Indeed it is. We just shouldn’t lose sight of how many of those “calories in” come from Coke, Pepsi and the like. If we could cut back on our soda drinking, we would be both thinner and richer.

From the Times’ point of view, the way to prosperity is avoiding silly taxes. How ’bout if we just don’t impose those taxes in the first place?

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