Tax Proposed on Soda and Other Sweet Drinks

Makers and sellers of soda and other sweet drinks have intensified a fight against proposed taxes on their products, as a growing number of cities and states are weighing the measures to help fill depleted coffers.

A soft-drink bottler offered what it called a $10 million good will gesture donation for health and recreation programs in Philadelphia, as city officials there considered a proposal for an excise tax to help plug a budget hole and fight obesity. Politicians say the taxes will help curb rates of obesity and diabetes and can pay for health programs. But retailers and the beverage industry say the taxes are unpopular, unfair and simply won't work.

Industry officials are also considering trying to organize a referendum in Washington State to repeal a three-year excise tax on carbonated beverages of two cents on every 12 ounces. The moves come as officials in at least 20 cities and states have proposed new taxes or the removal of tax exemptions on non-alcoholic beverages so far this year. The beverage industry has spent millions of dollars since 2009 on lobbying and advertising against proposed taxes, including a federal tax initially proposed as part of the health-care reform bill.

So far, few such taxes have actually been imposed. The final federal health overhaul didn't include a soft-drink tax. And while several state and city legislators initially expressed enthusiasm for new soda taxes, only Washington State has approved a new excise tax on soda thus far, while Colorado removed a sales-tax exemption. Several other states have existing small taxes on soft drinks, but those stirring controversy are the proposals for new, larger taxes. Industry officials argue that taxes would penalize consumers at a time when people are already struggling and lead to lost jobs for bottlers and distributors.