A referendum vote on the proposed tax on soda, wine and beer is likely to occur in November. The coalition responsible for seeking the referendum is framing the issue as one about tax burdens, arguing that an increase of 11 cents per liter of soda or 16 cents per six pack of beer is going to be the final straw that pushes Mainers into poverty. What isn’t mentioned is that this tax will reduce our collective cost burden in the long run. Besides providing health insurance funding for 18,000 working Mainers, this tax may discourage excess consumption of sugary beverages and alcohol, which would benefit taxpayers on multiple levels. If anything, the proposed taxes don’t go far enough. Taxes on sugary drinks and alcohol should be raised to the point where they pay for the burden their over-consumption places on society.
Sugary beverages such as soda are a major culprit in the national obesity epidemic. About 2/3 of the US population is overweight or obese, and this collective weight problem, coupled with a sedentary lifestyle, is resulting in skyrocketing rates of diabetes and vascular disease. These diseases cost us billions of dollars per year in health care costs and lowered productivity.
Raising taxes on beverages sweetened with high fructose corn syrup is good public health policy, as it dampens consumption of these products – which negatively effect health.
The same argument is true for alcohol. There is plenty of evidence that the majority of alcohol-related deaths, disability and damage is attributable to drinkers who engage in occasional risky drinking. Adding 16 cents to the price of a six pack, or 7 cents to a bottle of wine may provide a financial incentive to avoid excess consumption. In fact, raising the price of alcohol has been shown to decrease numerous problems—including underage drinking, drinking and driving crashes, and alcohol-related violence and injuries. This could go a long way to reduce the estimated $430 million that Mainers spend on alcohol-related damages each year.
Furthermore, the tax on alcohol hasn’t been raised in 20 years, and because the tax on alcohol is calculated in cents per gallon sold rather than as a percentage of the price, the real value of the revenue generated by the tax has declined due to inflation. Unfortunately, the costs of the health and social services required to treat alcohol-related problems have increased over the same 20 year period. For this reason alone, a tax increase makes sense.
The example of tobacco provides a good analogue to the benefits of raising
taxes on products that are fundamentally corrosive to public health. Raising taxes on cigarettes suppressed demand for cigarettes, especially among youth.
Raising taxes on sodas and alcohol to pay for health insurance is a step in the right
direction because, if the tax is high enough, it will decrease soda and alcohol consumption and their associated consequences. A few cents per can or bottle will help fund the Dirigo Health Plan. A few more cents per can or bottle might actually help improve all Mainers’ health and that would be an even better thing.
This article was written by James Tasse, PhD, of Healthy Casco Bay. It was brought to you by Aroostook Substance Abuse Prevention. For more information about ASAP and its prevention efforts contact Clare Desrosiers, project director, at 521-2408.