Soda Tax, more like Soda Tax Cut

There have been new talks on the blogospheres about the idea of a soda tax. The idea is that an increase in the cost of soda brought on by a tax would make people adverse to buying soda, and would help people make more conscientious health decisions. The debate currently focuses on issues such as how effective the tax would be and whether the government should be involved in making these kinds of choices. I think there needs to more focus on an issue that's left completely undiscussed in the current debate: farm subsidies (something I will probably discuss about all too often in the future).

Soda is already taxed in this country, in the form of a subsidy. Money is taken from taxpayers by the government and given to extremely profitable agricultural companies that produce corn, which is processed into high fructose corn syrup, which is then used to sweeten sodas. The true cost of soda would be its market price, plus what a person pays in taxes to support farm subsidies. A soda tax would actually be a form of double taxation, with the corn producer getting all the breaks and consumer getting all the burdens.

The best way to resolve the problem is the eliminate the corn subsidy altogether. The price of soda would naturally increase relative to other goods to better reflect its real cost. The consumer would have a smaller tax burden. The producer would have to be more competitive and innovative. There would also be more competitiveness of healthier, once more expensive, alternatives. At the very least, it would make resubstituting cane sugar for corn syrup relatively cheaper.

So when people oppose the soda tax in favor of the status quo, they are in favor of a form of government intervention that hurts consumer's wallets as well as their waistlines.