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USA Today reports on the debate taking place in Washington, DC, about the possibility that there should be a federal tax on beverages sweetened with sugar, high fructose corn syrup and other sweeteners. Supporters say that such a tax would have two benefits – it would raise money for a government going more deeply in debt almost every day and it could reduce consumption of such drinks, which could affect the nation’s obesity crisis.

"There is robust scientific evidence that sugary-beverage consumption increases the risk of obesity, diabetes and heart disease," Kelly Brownell, director of the Rudd Center for Food Policy and Obesity at Yale University, tells the paper.

“The complexities of health-care reform aren't going to be solved by a tax on soda pop," responds Kevin Keane, a spokesman for the American Beverage Association, which represents the non-alcoholic beverage industry. "It's discriminatory. Why single out one product? It would not even make a dent in addressing the health-care challenge or the obesity challenge."

Both Democrats and Republicans say it is highly unlikely that such a tax could be enacted this year. But there seems to be a sense that a door has been opened, and that this issue will find its way to the fore yet again.
KC's View:
I’m not an economist and, in fact, I’m pretty much incapable of helping my kids with high school math – so there are limits to my analytical powers in this area.

But here’s my first thought. If such a tax were enacted, and it actually had an impact on consumption habits, wouldn’t it also have an economic impact up and down the food chain? Isn’t there the possibility that manufacturers would end up paying lower corporate taxes, and that people could get laid off in factories and from sales organizations, which would then impact their ability to pay income taxes?

I’m just saying…it probably isn’t as simple as just levying a tax and counting – and then spending – the money. Never is.