USA Today
June 4, 2009
By Dick Armey
As Congress and the president look to expand government’s role in health care, taxpayers are left singing the old Waylon Jennings line, “Your thirst for riches is more than my pockets can stand.” But with the Obama administration’s health care plan predicted to cost $1.2 trillion to $1.5 trillion over the next 10 years, middle-class taxpayers are about to find their pockets emptied even more. To pay for this, the Senate Finance Committee is considering a throng of new taxes, including higher levies on beer and wine, plus a new tax on non-diet soda.
In February, President Obama made a simple pledge before Congress, “If your family earns less than $250,000 a year, you will not see your taxes increased a single dime. I repeat: not one single dime.” But things must have changed dramatically in the past three months, because if Obama approves new taxes on beer, wine and sodas, then he will be imposing a massive new tax on the groceries of millions of middle- and lower-income Americans.
Expanding the nanny state
By reaching into Americans’ grocery carts, Congress and the president would be resorting to regressive taxation, as the burden of these beverage taxes would disproportionately fall on those earning less. Congress should be looking for ways to cut spending rather than trying to raise taxes on the middle class.
Some proponents of these new taxes argue that soda and alcohol should be taxed more because they are unhealthy. This is absurd. To be clear, these taxes have nothing to do with healthy lifestyles and everything to do with finding new, untapped sources of revenue.
The government has been taxing alcohol for decades, but taxing soda would represent an expansion of the nanny state.
For years, critics of soda have argued that it is a unique contributor to obesity. This flies in the face of both common sense and scientific research. The fact is that Americans are getting heavier because we’re eating more and exercising less.
Needed: Market visibility
Imposing new taxes on soda is also a dangerous way to go about financing new programs like health care. Congress’ Joint Committee on Taxation projects that revenue from a soda tax would generate increased revenue every year — from $4.5 billion in 2009 to $5 billion in 2013. Yet history has shown that if you tax a product, people buy less of it.
The president should explore other options for health care reform. The United States could dramatically drive down health care prices by simply increasing the role and the visibility of the market within the health care sector. Americans are disconnected from market prices — without which, it is impossible to make economic calculations.
Instead of taxing the middle class in order to socialize health care, the president should look at simple proposals that could make a big difference. One good place to start would be asking Congress to tear down the barriers that prevent individuals from buying health insurance across state lines. This would create competition and broaden the market at no cost to the taxpayer.
A Rasmussen poll found that 70% of Americans oppose a federal tax on soda, and with good reason. They recognize that once Uncle Sam begins imposing special taxes on items picked off the grocery shelf, it is going to be a slippery slope. Americans should be free to make their own decisions, whether it’s in the checkout lane or their doctor’s office.
Dick Armey was the main author of the Contract with America and served as House majority leader from 1995-2003. He is chairman of FreedomWorks, which advocates lower taxes, less government and more freedom.
