OBAMA SODA TAX

President Obama told an US men’s magazine that he wants to levy a tax on soft drinks. Obama said that a correlation between obesity and consuming soft drinks was very high. With a soda tax Obama wants to reduce consumption of soft drinks and also raise income in the country’s weak health system. Obama’s view is backed by a study of the New England Journal of Medicine. It says that a tax levy could lead to a price increase of 15 to 20 percent for all drinks containing sweetener. Further, consumption of soft drinks could shrink by eight percent if the price rises by 10 percent. The New York Times wrote that the tax levy could lead to tax revenue of $14.9 billion. The US soft drinks industry now has started a campaign against the tax claiming that such a tax would not reduce obesity and would furthermore have negative effects. The branch said that prices for soft drinks could rise by 40 to 50 percent. Coca-Cola CEO Muhtar Kent said Obama’s foray reminds him of times when Coke managers in the Sowjet Union had to watch the Russian government dictating consumers what to eat. However, there already is a soft drinks tax in 33 out of 50 states in the US. However, the tax is too low and does not flow into the federal health system.