Voters Have Spoken: They Like Their Pot and Soda

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Medical marijuana has been legal in California and other states for some time now, but Washington and Colorado are the first states to legalize recreational pot.  Do they realize the tax problems that they will face in the future?  The problems that medical marijuana dispensaries in California have faced time and time again are likely the same problems in store for Washington and Colorado, only on a larger scale.  At the root of the controversy is the fact that the federal government still classifies marijuana as a controlled substance and they will not always turn their head the other way just because the people have passed a state ballot measure.  One of the ways this emerges in the tax world is the “pot shops” are not allowed the same business expenses that other businesses would be allowed, so their tax bills are higher.  At least in California, the IRS has made it clear that there will be no tax relief for pot shops as long as the federal government still sees the drug as a controlled substance.

The Soda

Would a soda tax help reduce obesity?  We won’t know now — soda tax measures were shot down in the California cities of El Monte and Richmond.  Of course soda companies are filthy rich, and they spent an estimated $3.5 million to dissuade voters from passing tax increases on sugary beverages in these two towns.  As with any controversy, there are often attractive arguments to be made on both sides, and the groups with the most money and power are normally better able to get their message out.  At least that’s how the proponents of the soda tax see it.  The opposition (“Big Soda”) sees a soda tax as harmful to small businesses and not the right way to fight obesity.

The Soda Tax

It doesn’t rank all that high on our list of tax problems.  Maybe you don’t even know you’re paying it.  But at least 35 states already impose taxes on sugar-sweetened sodas.  Soda is believed to be one of the reasons we’re so fat here in the United States.

Tu can eat todos los donuts you quiero, pero tu better not wash it dowño con un 16oz beveragado!

~ Miguel Bloombito (via Twitter)

Until now, the American Medical Association (AMA) hasn’t taken any official position in the soda tax debate.  However, they are expected to put it to a vote this week at their annual meeting in Chicago.  Is there even any question which side they will take on the issue?  My mom never let me eat dessert before dinner, and I don’t think the AMA would pass up an opportunity to take a stand against soda.

If a soda tax is effective, it won’t be in its direct deterrence of soda drinkers.  At a rate of one or two cents per ounce, it would hardly make a difference to most soda addicts.  The effectiveness of a soda tax depends on how soda tax revenue is spent.  If the revenue is spent on programs aimed at curbing obesity, then it could make a significant difference.

One particular obesity program that I think makes sense involves improving access to good cold drinking water at schools and in public places.  Sometimes people are just thirsty and need something cold to drink.  If you put soda in front of them, they’ll drink it.  But if there’s water, they’ll drink that too.  Why is it that public water fountains (the kind typically found in schools and parks) usually produce either warm water or none at all.  And when they do work, the water pressure is normally so weak that you can get little more than a sip.  We should have the technology to build high-quality water fountains these days; ones that actually work.  And maybe a soda tax could help fund this sort of thing.