Favorite

Will the soda pop tax go national? 

Arkansans already pay it.

click to enlarge REFRESHING: Could a soft drink tax pay for better health care?
  • REFRESHING: Could a soft drink tax pay for better health care?

President Obama is being urged by health-care activists to propose a national tax on soft drinks, both to slim down Americans — especially children — and to raise money for improvements to the national health-care system. Even though Obama hasn't committed himself, bottlers are buying ads opposing a soft-drink tax.

In making a decision, Obama may look to Arkansas for guidance (though he probably won't get much). Arkansas's had a special state tax on soft drinks since 1992. (Soft drinks also are subject to the state sales tax on food. That tax has been reduced recently, and legislators and the governor say they intend to abolish it eventually.) Sources differ on how many states still have special soft-drink taxes., but it's known that a number of states have repealed them in the last 20 years or so. North Carolina is one of those. In 1992, Arkansas modeled its soft-drink tax after the one North Carolina had at the time.

Robert Bushmiaer, assistant administrator of the Miscellaneous Tax Section of the Arkansas Department of Finance and Administration said that he knew of two more states with soft-drink taxes — Virginia and West Virginia — and that there might be others. On the other hand, the Center for Science in the Public Interest, which wants a national soft-drink tax, says that “At least 25 states and the city of Chicago have small, special taxes on soft drinks … ” On the third hand, a soft-drink tax opponent wrote recently in Business Week magazine that state soft-drink taxes had been abolished everywhere except Arkansas and West Virginia.

Nonprofit groups such as the Center for Science in the Public Interest believe that a soft-drink tax, if large enough, would reduce consumption of sugary soft drinks and that this would result in less obesity and better health generally. The Rudd Center for Food Policy and Obesity at Yale University says “Poor nutrition affects the health of everyone, overweight or not.” Reduced consumption of sugar would improve dental health too, proponents say.

But CSPI concedes that the record of state soft-drink taxes does not provide support for the theory that taxation would reduce consumption. “Unfortunately, existing state taxes are too small to significantly reduce consumption and almost none of the revenues are earmarked for health promotion,” it says. The Arkansas tax is the equivalent of two cents per 12 ounces. The revenue is earmarked for Medicaid.

No record could be found of any study devoted exclusively to the Arkansas tax's effect on consumption. Tax officials say the soft-drink tax has been a strong and steady source of revenue, producing $47.6 million in the fiscal year that ended June 30. If there's been any significant reduction in the consumption of soft drinks, it's most likely due to the increased popularity of bottled water. Bottled water accounted for a tiny percentage of beverage sales in 1992.

The Arkansas tax was enacted at a special legislative session in December 1992, after President-elect Bill Clinton had resigned the governorship and been succeeded by Jim Guy Tucker. Medicaid was facing a financial crisis, as it frequently does. Soft-drink bottlers fought the tax fiercely. Besides the usual arguments that are made against new and increased taxes, opponents of the soft-drink tax argued that it was regressive, that it would fall most heavily on poor people. Some legislative supporters of the tax turned that argument around, saying that another “poor man's beverage” — beer — was already taxed and its competitors should be too. But mainly it was the needs of Medicaid, the program for low-income ill and elderly,  that carried the day. Supporters of the tax said that without new revenue, health services such as nursing home care, prescription drugs and home health care would be in danger. People involved in the fight over the tax remember no discussion of the idea that the tax might improve Arkansans' health by reducing the consumption of soft drinks.

Bottlers obtained the necessary signatures to refer the tax to a vote of the people, and waged an expensive advertising campaign. Supporters spent comparatively little money, but ran an intensive, well-organized grassroots campaign. Most nursing-home residents are on Medicaid, and all over the state, the families of these residents were told that the local nursing home would close if the soft-drink tax were abolished. In other words, Mama would be coming home. In November 1994, Arkansans voted for the tax, 366,897 (55 percent) to 297,434. There's been no organized campaign against the tax since, although bottlers have succeeded in repealing soft-drink taxes in other state legislatures. In retrospect, the bottlers' decision to refer the Arkansas tax to a popular vote looks like a great mistake. To repeal the tax now would require legislators to flout the will of the people.        

Favorite

Comments

Subscribe to this thread:

Add a comment

More by Doug Smith

  • The L word and the C word

    I was excited to see the newspaper headline "Bielema liberal." "After all those neo-Nazis, we've finally got a coach who thinks right," I told friends. "I wonder if he belongs to the ADA."
    • May 1, 2014
  • Who's exasperated?

    Jim Newell was gripped by exasperation himself after reading this item in the business section. "Exacerbated" is the word the writer wanted, he sagely suggests.
    • Apr 24, 2014
  • We will run no race before it's ripe

    "What year would Oaklawn recognize as its 100th anniversary? After all, Oaklawn's advertising material is ripe with 'Since 1904,' but it's widely reported the first race wasn't run until 1905."
    • Apr 17, 2014
  • More »

Readers also liked…

  • Kanis development decried

    Fletcher Hollow wrong place for density, neighbors tell LR planners.
    • Oct 8, 2015
  • Eligible voters removed from rolls

    Arkansas Times reporters contacted election officials around the state to see how they had handled flawed felon data from the secretary of state. Responses varied dramatically.
    • Aug 11, 2016
  • Real Republicans don't do pre-K

    Also, drifting away from trump, Hudson's downfall at ASU and more.
    • Aug 11, 2016

Most Shared

  • Labor department director inappropriately expensed out-of-state trips, audit finds

    Jones was "Minority Outreach Coordinator" for Hutchinson's 2014 gubernatorial campaign. The governor first named him as policy director before placing him over the labor department instead in Jan. 2015, soon after taking office.
  • Department of Arkansas Heritage archeologist resigns

    Bob Scoggin, 50, the Department of Arkansas Heritage archeologist whose job it was to review the work of agencies, including DAH and the Arkansas Highway and Transportation Department, for possible impacts on historic properties, resigned from the agency on Monday. Multiple sources say Scoggin, whom they describe as an "exemplary" employee who the week before had completed an archeological project on DAH property, was told he would be fired if he did not resign.
  • Forget identity politics

    Amid the climate of disbelief and fear among Democrats following Donald Trump's election, a fascinating debate has broken out about what's called "identity politics" on the left, "political correctness" by the right.
  • Lawsuit filed against ADC officials, prison chaplain convicted of sexual assault at McPherson

    A former inmate who claims she was sexually assaulted over 70 times by former McPherson Womens' Unit chaplain Kenneth Dewitt has filed a federal lawsuit against Dewitt, several staff members at the prison, and officials with the Arkansas Department of Corrections, including former director Ray Hobbs.
  • Lessons from Standing Rock

    A Fayetteville resident joins the 'water protectors' allied against the Dakota Access Pipeline.

Latest in Arkansas Reporter

Visit Arkansas

Arkansas remembers Pearl Harbor

Arkansas remembers Pearl Harbor

Central Arkansas venues have a full week of commemorative events planned

Event Calendar

« »

December

S M T W T F S
  1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 31

Most Viewed

Most Recent Comments

  • Re: Learning to love North Little Rock in Park Hill

    • My father in law built this house from WW2 materials he bought cheap. The walls…

    • on December 5, 2016
  • Re: A killing in Pocahontas

    • my name is kimberly some parts are true some are not travis was a victum…

    • on December 4, 2016
  • Re: Vive la resistance!

    • We are not asking you to place a stent in the Democrats Heart nor to…

    • on December 4, 2016
 

© 2016 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation