Tax on Soda

The debate over a tax on sugary soft drinks — billed as a way to fight obesity and provide billions for health care reform — is starting to fizz over.

The tax would apply to soft drinks, energy drinks, sports beverages and many juices and ice teas, but not sugar-free diet drinks.

President Obama has said it is worth considering. The chief executive of Coca-Cola calls the idea outrageous, while skeptics point to political obstacles and question how much of an impact it would really have on consumers.

But a team of prominent doctors, scientists and policy makers says it could be a powerful weapon in efforts to reduce obesity, in the same way that cigarette taxes have helped curb smoking.

The group, which includes the New York City health commissioner, Thomas Farley, and Joseph W. Thompson, Arkansas surgeon general, estimates that a tax of a penny an ounce on sugary beverages would raise $14.9 billion in its first year, which could be spent on health care initiatives.

The study cited research on price elasticity for soft drinks that has shown that for every 10 percent rise in price, consumption declines 8 to 10 percent.

The soft drink industry has adamantly resisted the notion that its products are responsible for a national increase in obesity or that a tax would help curb the problem.

What do you think????

From: http://www.cnbc.com/id/32896454/