The word came from various sources yesterday, and in a consistent form, that the House of Representatives will propose a tax on soft drinks, juice drinks, sports drinks and other non-alcoholic beverages as a means to pay for health care reform. While no one has seen a formal proposal yet, this proposed tax would purportedly raise $50 billion to pay for a $1.5 trillion health care package - or about 3 percent of the cost for health care reform.
In other words, this tax won't make a dent in the health care reform agenda. Nor will it make a dent in improving the health of families. But this tax will make a dent in the already strained budgets of hard-working families.
American families already are feeling the squeeze from this economy; the last thing we should be doing is raising their taxes. Americans received more bad news in recent days that the economy is still in trouble and, by many measures, is getting worse.
The Washington Post reported in a story headlined "Job Losses Dampen Hopes for Recovery" that unemployment rose to 9.5 percent in June as employers cut nearly half a million jobs – far more than the government expected. The Post cited a broader measure of unemployed to include those who are under-employed: mainly they're working part-time when they want to work full-time. Using this measurement the nation's unemployment rate is 16.5 percent.
On top of the bad job numbers, wages continue to fall or remain flat each month. So if workers aren't losing their jobs, they may be taking pay cuts - or certainly not getting pay raises to keep pace with rising costs.
Additionally, this tax would be borne most heavily by the lower-income and middle-class families who can least afford to pay it. A Congressional Research Service study showed that 70 percent of the burden of the soda tax would be paid for by those earning less than $91,297 a year. And if we were to use President Obama's standard – his promise not to raise one single dime in taxes on anyone making less than $250,000 – then 96.4 percent of this tax burden will be paid for by families under that threshold.
So why in the world would members of the House of Representatives even think of piling on and further squeezing hard-working families by raising their taxes in these hard times? It makes no sense to start reaching into the grocery carts of these families and taxing some simple pleasures. Especially when it's not going to make a dent in paying for health care reform or in improving the health of Americans (remember, because of our companies broader beverage portfolios, soft drink sales have declined annually since 2000 BUT obesity rates have continued to rise since 2000.)
In these economic times, nickels and dimes add up for the American people. And they're getting tired of being nickled and dimed to death in new taxes, and tax proposals, this year.
So we ask those in the House who may be considering a tax on soft drinks to find a better, more effective way to pay for health care reform. It's out there. And think about your constituents. They need some economic relief right now. Not more taxes on their groceries.
When it comes to this tax idea, just don't do it.