One of the more interesting things to follow is to see what people are willing to pay for through taxes. In some cases, citizens are willing to see an increase in taxes in order to pay for shoring up Social Security, or they might vote for a higher tax rate if it means more funding for local schools.In an interesting twist, though, the citizens of Berkeley, California decided to add a tax to sodas and energy drinks. There have been attempts to tax sugary drinks in the past, with city councils getting involved. This, however, represents an interesting move by voters to express displeasure with all the sugar in many drinks.
What is the New Tax?
The soda tax in Berkeley will add one cent for every ounce of soda or energy drink. So, as 12-ounce energy drink would see an increase of 12 cents to its cost. A 16-ounce bottle of soda would see a 16-cent hike.
This new tax is meant to help deter some of those who would drink these unhealthy liquids. Citing studies that indicate that sugary drinks can lead to long-term health problems throughout life, supporters of the bill passed it in the hopes that higher prices will curb the purchase of sodas and energy drinks.
Soda and sugar taxes join other “sin” taxes as proposed deterrents to behavior that is deemed unhealthy and bad for society as a whole. Many lawmakers and health advocates hope that charging more for unhealthy items will make them less attractive than their healthier counterparts. The same idea is used in states where they charge higher taxes on cigarettes and alcohol.
Efforts to Cut Calories
Drink manufacturers seem to be waking up to the possibility that similar taxes could take hold in other places. Right now, taxes on sugary drinks aren’t very widespread. In fact, San Francisco didn’t garner enough votes to pass a similar measure. Additionally, when a local lawmaking body attempts to pass such a tax, it is usually hotly contested.
However, beverage makers aren’t sitting still. The American Beverage Association released a statement recently to the effect that it is encouraging a voluntary effort to find ways to cut the calories consumed in drinks. This, of course, means that more beverage makers might be looking for lower-calorie substitutes for sugar.
There seems to be a growing movement toward health, and that means that unhealthy options are less likely to thrive in the future. Higher taxes on unhealthy foods could mean lower profits for some companies. So, even as society moves toward health, it’s possible that certain companies might not do as well as they would like.
For consumers, though, it might be an overall win for their pocketbooks. It’s possible to avoid paying “sin” taxes by modifying behaviors. Cutting back on sugary drinks can save money at the store (since you aren’t buying as much), and it can mean health savings down the road as consumers avoid chronic conditions, like diabetes and heart disease, that are related to consuming large amounts of unhealthy foods.