It’s Tax Day – a day when many people writing checks to the Internal Revenue Service (IRS) ask, “Am I getting my money’s worth?” According their website, the IRS definition of tax fairness explains there are two criteria: benefits received and ability to pay.
“Benefits received means that people should pay taxes in proportion to the benefits they receive from government goods and services.”
There are plenty of benefits Americans receive from their taxes on which most people would agree. Roads and bridges, police and fire protection, public education and courts are just a few examples.
Sometimes, however, the “benefits” associated with a tax are less certain and call into question the issue of fairness. For instance, is it fair to place a tax soda, with the promised benefit of improving public health, even if there’s no evidence that the tax will make people healthier?
Last year, two professors published a paper titled, “Slim Odds: Empirical studies provide little evidence that soda taxes would shrink Americans’ waistlines.” Jonathan Klick, professor of law at University of Pennsylvania Law School and Eric Helland, professor of economics at Claremont McKenna College, analyzed the body of research to determine if soda taxes have an effect on obesity.
They determined that there is no public health benefit from taxing soda, and were quoted in the paper as saying:
“Not only is the tax unlikely to generate much revenue as soda drinkers substitute away from the sugary beverages, most of the evidence suggests that they will substitute toward consuming other foods and beverages that are just as bad or worse for their health.”
Despite the lack of evidence that a soda tax would provide a benefit, politicians around the country continue to look for ways to make consumers pay more money to enjoy soft drinks, juice drinks, teas, flavored waters, sports drinks and other beverages.
For them, it’s not about fairness. It’s about politics. And that’s why our industry continues to oppose these discriminatory and regressive taxes.