What is a Soda Tax?

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  • Written By: T. Carrier
  • Edited By: John Allen
  • Last Modified Date: 27 September 2019
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A soda tax — or a soft drink tax — requires individuals or businesses to pay an additional sum of money for the purchase of soft drink beverages. Laws concerning this type of tax vary by region. Advocates argue that the tax helps raise needed money for important projects while promoting healthier dietary and environmental habits. Critics, however, contend that the tax is unfair and is an example of overreaching government intervention.

Taxation typically involves adding a small financial charge to an overall sum in order to raise funds for local or regional governance. Such regulation is overseen by a region's governing body. More specifically, excise taxes are placed on specific goods for sale to consumers. Several areas have utilized such a system to tax sugar-based carbonated beverages containing ingredients like corn syrup and other sweet-intensive additives. Law-makers and debaters are constantly changing the legal landscape of the soda tax, with some regions imposing the tax and others abstaining from soda taxation.


One major proposed benefit of the soda tax is health enhancement. Research from several medical and scientific organizations has suggested that sugar-sweetened beverages like soft drinks contribute to obesity and poorer health habits, particularly in children. Concerns about soft drinks have led to efforts to improve drinking habits in many areas. A push by some organizations for healthier vending machine options, the bottled water phenomenon, and taxation on soft drinks — oft dubbed "liquid candy" — have resulted. Proponents of a soda tax thus hope that by increasing the overall price of soft drinks through taxation, individuals will be discouraged from purchasing large amounts of the product.

Other considerations drive the push for a soda tax as well. Money derived from the tax could be used to fund socially beneficial projects like education and health care, advocates claim. A decrease in soft drink consumption could also curtail the need for container deposit legislation. Such laws require that sellers of certain beverages gather a financial sum, or a deposit, from buyers. This deposit is collected on the drink containers, and it may be refunded provided the buyer returns the containers to a recycling center or other certified organization. Since the law is implemented to encourage environmental responsibility, a reduction in soft drink container waste would eliminate some of the recycling necessity.

Opponents of the soda tax contend that taxes should not be used to influence individuals’ lifestyle choices. A government should not attempt to legislate non-criminal behavior, nor should it punish individuals for perceived negative eating or drinking habits. Further, a soda tax hurts those individuals employed in the soft drink industry by subtly steering consumers away from their product. Such accusations have also been aimed at similar tax measures, like proposed cigarette taxes.


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