When it comes to taxes on beverages the idiom “what’s old is new again” rings true. Politicians looking to line government coffers are pushing legislation to tax beverages like soft drinks, sports drinks, teas and even some flavored waters. But, according to a Washington Post article these taxes have been tried before and they failed.
“Contrary to the claims of advocates, America's first soda tax was not a success,” wrote Washington Post reporter Caitlin Dewey of the tax passed by Congress 100 years ago.
The tax was short lived and according to the Washington Post article, it also “proved both ineffective and unpopular.” Two economists from the time “slammed them as ‘most annoying measures’ that wouldn’t be effective.”
It was also unsuccessful at generating revenue. The Washington Post spoke to Ajay K. Mehrotra, the executive director of the American Bar Foundation and a professor of legal history at Northwestern University, who commented, “’It was almost inconsequential as a revenue-raiser — it made hardly any money. And I don’t think the states passing those taxes now will make much money, either.’”
Perhaps this is a history lesson those currently in office should pay attention to.
Read the story in full here.