TBO.com - TBO is Tampa Bay Online

Increased taxes on alcohol, soda considered

Tribune file photo

The proposal would increase the tax on a bottle of wine from 21 cents to 70 cents. Supporters say the higher taxes on alcohol would raise $60 billion in 10 years.

ADVERTISEMENT

By ALAN FRAM

The Associated Press

Published: June 17, 2009

Washington - A push for new taxes on soda, beer and wine to help pay for Americans' health care is stirring up more than just the beverage industry.

Advertisers, corn refiners - even addiction treatment centers - have mobilized their lobbyists, reflecting how a tax increase for a handful of popular products can reverberate broadly across Washington's interest groups.

The Senate Finance Committee is considering raising taxes on alcohol and imposing a new levy on soda and other naturally sweetened drinks, on which there is no federal tax, to help pay for overhauling health care. The committee calls them "lifestyle tax proposals," saying the levies would slow sales of unhealthy products that contribute to rising medical costs.

Soft drink and alcohol lobbyists have snapped into action, though so far their campaigns have been quiet compared with the blaring, multimillion-dollar battles that typify major showdowns.

Their low-key approach is based partly on committee leaders' warnings to refrain from public attacks or be accused of sabotaging the health care overhaul. They also have held back because they have faced only modest lobbying from tax proponents and because they think the proposal may prove so unpopular that it ultimately won't threaten their businesses.

"They don't want to call attention to a quietly smoldering fire," said Rogan Kersh, an associate dean at the Wagner School of Public Service at New York University.

Opponents occupy range of industries

The committee's targets are alcohol and drinks with sugar, high fructose corn syrup and similar sweeteners would be targeted; diet drinks with artificial sweeteners would not be on the list. Other industries also are on alert, worried that the idea of "lifestyle taxes" could spread to other products deemed unhealthy.

"Are they going to hit couch manufacturers? School districts that have canceled physical education?" joked Neil Trautwein, health care lobbyist for the National Retail Federation, which opposes the plan and whose members include fast-food restaurants.

Sugar producers and manufacturers of sweetened foods are opposed, as are dairy farmers and milk processors, because chocolate milk would be hit. Alcohol retailers want to go the opposite way, pushing for a cut in the existing tax on their products. That tax ranges from 21 cents per bottle of wine to 33 cents per six-pack of beer to $2.14 per fifth of hard liquor.

Even local governments are following developments closely. Pennsylvania, one of several states that profit from alcohol because it runs the stores where it is sold, is watching to see how it might be affected.

The American Beverage Association, representing makers of sodas, sports drinks and similar products, has been among the most active foes. It enlisted seven groups to join in a letter to senators opposing the tax, including the American Advertising Federation, whose members include Coca-Cola and Pepsi-Cola, and the Corn Refiners Association, whose companies make sweet syrups that would be taxed. Also signing were associations for grocers, food marketers and food vending-machine operators.

"Dangerous Tax Threat Looms on Capitol Hill," the beverage association's Web site warns, urging the industry's 220,000 employees to e-mail Congress. The Distilled Spirits Council of the United States has a Web site called "Stop Hospitality Taxes." It lets viewers automatically send e-mail opposing the tax to members of Congress and provides paragraphs senders can insert into their messages with one click.

Support is low-key, qualified

The Center for Science in the Public Interest, a consumer advocacy group, has been a leading proponent of the taxes. Executive Director Michael Jacobson wrote an op-ed column supporting the levies in the Montana Standard newspaper, in the home state of the panel's chairman, Democratic Sen. Max Baucus.

"Who wants to talk about raising taxes, especially for a product people enjoy?" Jacobson said in an interview, explaining why support for the plan has been low-key. "These aren't smokestacks."

Even addiction treatment providers are watching.

Ron Hunsicker, who heads a trade group for such centers, said he supports the alcohol tax if "those dollars will come back and beef up" federal spending on treatment programs.

Recent history shows the challenge. Maine voters rejected a soft drink tax in November, and New York Gov. David Paterson dropped a proposed tax on sodas earlier this year. Several senators on the Finance committee, including top Republican Charles Grassley of Iowa, have said they oppose the proposal.

"Before you tax Joe Six-Pack on his beer and Joe Junior on his soda pop at the Little League game, people are going to say, 'Can't you go out and find some savings from'" the health care system, said one committee member, Sen. Ron Wyden, D-Ore.

Share this:

Loading Comments...

Email Print

ADVERTISEMENT