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Soda tax proposal fizzles in Hawaii

By Caroline Scott-Thomas, 16-Feb-2011

Related topics: Regulation, The obesity problem, Soda tax

The latest proposal to tax soda at a state level has fizzled, as Hawaiian Senators have voted against a plan to tax sugary drinks by up to 25 cents a bottle.

The Senate Health Committee voted 4-1 against the plan, but kept proposals to increase a tax on alcohol, which could see alcohol taxes raised by about 50 percent.

Hawaiian governor Neil Abercrombie proposed establishing a tax on soda and similar beverages in the state in his first State of the State address last month, as part of a budget plan to close the state’s deficit. The newly elected Democratic governor said a soda tax in the state could generate about $50m a year, $10m of which would be directed to programs to tackle obesity and diabetes.

The concept of taxing sugary beverages has been proposed on a state level throughout the United States as a means of plugging state budget deficits, as well as a possible way to fight obesity, and 33 states already impose a sales tax on soda. Hawaii has a budget deficit of $844m and Abercrombie said his aim is to close it within the next two years.

Soft drink companies had opposed the tax, saying that it would do little to combat obesity or other health problems, and unfairly targeted one product as largely responsible for obesity.

Nationwide, 68 percent of Americans were overweight or obese in 2008, including 34 percent who were obese – up from 15 percent in 1980, according to figures from the Centers for Disease Control and Prevention.

However, research intended to find out if taxing sugary soft drinks would have an impact on obesity rates has had mixed results. Nevertheless, some research has suggested that even a small amount of weight loss could be beneficial for many Americans and that calorically sweetened beverages are disproportionately consumed by overweight people.

A recent study from the US Department of Agriculture’s Economic Research Service, for example, found that 10.6 percent of overweight adults consume more than 450 calories a day from calorically sweetened beverages – nearly three times the average of 152 calories.