Tuesday, May 19, 2009

Sweetened Beverage and Alcohol Taxes to Pay for Obamacare?

This is what they say in a Senate Finance Committee Report.
A tax on soft drinks and other sweetened beverages and higher taxes on alcohol are among the options U.S. lawmakers will consider to pay for expanded healthcare coverage, a Senate report said on Monday.

The beverage taxes were among the options outlined in a Senate Finance Committee report that panel members will review in a closed-door session on Wednesday.

Senators will look at a mix of taxes and cost savings to pay for a healthcare overhaul that aims to provide affordable medical coverage for all Americans, including an estimated 46 million who have no insurance.

Wednesday's session will likely be contentious as lawmakers search for politically palatable ways to finance health reform amid soaring budget deficits.

President Barack Obama wants Congress to pass the overhaul by the end of the year. He has called for a $634 billion "reserve fund" in his budget as a downpayment toward expanding coverage to the uninsured.

Many analysts believe the final cost is likely to be much higher. Senate Finance Committee Chairman Max Baucus, and other Democrats, argue that an overhaul of the $2.5 trillion U.S. healthcare system is needed to control soaring costs.

"Without healthcare reform, healthcare spending will reach $4.4 trillion by 2018," Baucus said in a statement accompanying the release of the possible financing options.

The committee is expected to draft healthcare legislation next month with aim of winning Senate passage by August. The House of Representatives is working on a similar timetable.
Raising taxes on sweetened beverages would provide an added benefit in helping to fight obesity, which drives up healthcare costs, the committee report said. The proposal calls for no tax on artificially sweetened drinks.
Social engineering by changing the tax code always results in unintended consequences. Bootleg Coke and Mountain Dew, Flap can see it now.

And, how about buying your beer and soda in Mexico or on the nearby Indian Reservation?

As you can see, there are ways to avoid the taxes. So, where is the revenue enhancement to pay for Obamacare = universal health care?

Plus, the most obvious question: Is there really enough money to be gained by these increased taxes?

It is doubtful.

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