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Have a drink and share the sacrifice
Rep. David Obey (D-Wis.) and several of his colleagues want wealthier Americans to “share the sacrifice” and contribute higher taxes to support the expansion of America’s war effort in Afghanistan. They have proposed a temporary tax on upper-income Americans to raise enough money to avoid increasing an already bloated deficit, preempt a raid on funding for essential domestic programs, and remind us that war doesn’t come cheap.
There’s another way, a better way, for Congress to engage the American people in funding the war — and, as a bonus, reducing healthcare costs. What patriot would oppose higher taxes on alcoholic beverages and a new tax on sugary beverages to support our troops? We could even test the patriotism of the large foreign corporations that sell almost all of the beer and much of the liquor and wine consumed in this country, because the alcohol surtax would be imposed on them. They could then choose whether to pass the tax on to their hard-working American customers.
Taxing sugared beverages and upping the tax on booze would allow most Americans to feel pride (and negligible pain) in their contribution, but would also help the heaviest drinkers moderate their consumption, thus attacking our nation’s costly problems of obesity and alcohol abuse. Those health threats loom even larger than the costs of our $100 billion per year involvement in Afghanistan. According to government sources, alcohol imposes some $200 billion per year in economic costs on society (mostly in lost productivity). Obesity-related medical problems, including heart disease, diabetes, and cancer, soak up close to $150 billion.
According to a recent study by Ken Thorpe, chairman of the Department of Health Policy and Management in the Rollins School of Public Health of Emory University, the obesity epidemic if left unaddressed will grow, increasing the healthcare tab in 2018 to an unsustainable $344 billion. And soda pop may be the single largest driver of the obesity epidemic in America. Its popularity among young people, the principal targets of saturation marketing by carbonated and noncarbonated soft drink companies, make it a natural target for tax consideration, particularly to counter obesity and diabetes in children. (And this is about national security: Just ask the retired generals and admirals at MisionReadiness.org who report that “27 percent of young Americans are too overweight to join the military.”)
Despite the growing healthcare costs associated with obesity, soft drinks, and other sugar-sweetened beverages remain untaxed at the federal level (more than 20 states impose sales and/or very modest junk-food taxes). Imposing a stiff tax (a penny per ounce) on obesity-promoting sugared beverages could raise as much as $160 billion over 10 years. A price increase that really cuts consumption would make a real dent in healthcare costs.
Federal alcohol taxes, last increased in 1991 and still low by historical and international standards, today contribute a paltry $10 billion annually to the U.S. treasury. The value of those taxes has been eroded some 40 percent by inflation during the past 18 years because the tax rates are based on fluid volume, not price. The tax has shrunk even more dramatically in the past six decades, since alcohol taxes were raised to support the Korean War in 1951.
Most of the proposed tax payments would come from industry’s best customers, the small percentage of consumers who down most of the beer, wine, liquor and soft drinks. Nonetheless, because most of us drink one or more of those beverages at some time during the year, we would all still get a chance to share the sacrifice in a small way.
Taxing sugar-sweetened beverages and booze could provide billions in new revenues to hunt down Bin Laden, prop up Medicaid, expand healthcare coverage and offset deficit spending. Can’t we all drink to that?
Hacker is director of the Alcohol Studies Project with the Center for Science in the Public Interest.
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