California soda tax would have sour results

Proposed soda taxes in two California communities may turn out to be more sour than sweet, according to one report.
The tax initiatives, which are on the  ballot in Richmond and El Monte, have been touted as necessary measures to reduce obesity and increase revenue for the local governments.
A recent study by the Tax Foundation disputed the effectiveness of the initiatives, however, and concluded that “sin” taxes “disproportionately harm low-income individuals.”

Soda would be taxed at one cent per ounce. A 24-pack of soda would subsequently be taxed $2.88. The tax is imposed on the merchants as a business license fee, rather than a direct tax on each soda purchase.
“This rate is larger than any beer excise tax in the U.S., the highest of which is $1.07 per gallon in Alaska. Only twelve states tax wine at a higher rate than the proposed local soda tax rate, with California consumers paying a 20 cent per gallon tax and the median state taxing it at 72 cents per gallon,” the Tax Foundation reported.
The Tax Foundation also determined that this type of tax does not effectively motivate people to change their behavior and would therefore lead, at best, only to a minimal impact on the obesity epidemic. In fact, the foundation cited a study by Cornell University that found that increases in soda taxes actually lead to higher beer consumption.

Read more: http://dailycaller.com/2012/10/28/report-california-soda-tax-would-have-sour-results/#ixzz2AaLnTcNu