They brought the world Coca-Cola and Pepsi, two of the globe's most recognisable brands. Now Americans – not renowned for favouring new taxes – have been told that a national levy on its fizzy drinks could not only wipe out the budget deficits of most US states but significantly reduce obesity and diabetes.
The proposal from the Centre for Science in the Public Interest – a health advocacy group – follows the release of a study last week claiming budget-strapped states, including California, could raise $10bn (£6bn) a year by raising a tax of 7 cents on each can of Coke or similar sodas.
Twenty-five American states already tax fizzy drinks. The new study suggests that all states should be made to follow suit.
The proposal is being bitterly opposed by the food industry and their lobby groups. "The tax code should not be used as a tool for social engineering. Nor should it be an instrument for penalising individuals' personal food choices – choices that some government officials find distasteful," J Justin Wilson, senior research analyst at the Centre for Consumer Freedom, told the Los Angeles Times.
"President Obama is exactly right when he says kids are drinking too much soda," said Michael Jacobson, executive director of the Centre for Science in the Public Interest. "Soda is dirt cheap and promotes expensive and debilitating diseases, which in turn run up health care costs at all levels of government."
The Senate Finance Committee raised the prospect of soda taxes and higher alcohol taxes when it released a policy options paper on health care reform in May. Such taxes were not included in thedraft legislation released by Finance Committee Chairman Max Baucus (D-MT) yesterday, nor have they been offered in an amendment during the committee’s ongoing markup, but CSPI and other health groups are still urging members of both houses of Congress to include soda taxes in the final legislation.
"About half of the states have small soda taxes and there certainly hasn't been any outrage over them," said Jacobson. "If the Senate Finance Committee decides to leave these billions and billions of dollars on the table, I suspect more state legislatures will tap soda taxes to help pay for their own prevention efforts. In fact, more states could do what New York City is doing, and fund an ad campaign designed to discourage soda consumption."
What do you think? Should soft drinks be taxed across the United States?