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The Coca-Cola Company (KO), PepsiCo, Inc. (PEP), And A Taxing Decision for Soda Makers

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The Coca-Cola Company (NYSE:KO)It’s a mark of how far the U.S. has fallen that it ranks 10th — 10th! — on the list of countries with the most economic freedom, surpassed by the likes of Singapore, Hong Kong, Australia, and even Denmark. There’s something rotten when Denmark — a country with the highest tax obligation of any country in high-tax Europe — can still otherwise beat out the U.S. economically.

Yet even that bastion of tax-and-spend economics realizes sometimes you need to cut taxes if you want to spur growth. It has proposed repealing its tax on soda, partially as a response to Danes who simply cross the border into Germany to buy their beverages, but also because of the realization that their economy was becoming less competitive because of the imposition. It’s notable that Denmark also repealed its tax on high-fat foods.

The Union of European Soft Drink Associations applauded the move, saying: “Soft drink taxes are on the wane and being voted down by governments and parliaments across Europe. They have not proven to achieve any public health objectives and they destroy jobs and economic value.”

Compare that, however, with the mind-set here in the U.S., where New York’s Nanny Mayor Michael Bloomberg thinks he has the power to limit the size of sodas you can drink in order to protect your health (he’s also waged war on trans fats, smoking, and other individual-choice decisions). Unfortunately, he’s not alone. The Center for Science in the Public Interest reports that 39 states have special taxes on sugary drinks, and lest you think it’s a real concern over health issues and not simply a means to raise more tax revenue, even CSPI laments that despite raking in more than $1 billion annually, the taxes aren’t high enough to actually curb consumption and the states largely don’t earmark the funds for promoting good health.

The Coca-Cola Company (NYSE:KO) has come out with a position paper on obesity that acknowledges the epidemic rampant in the U.S. but goes on to point out no single type of beverage is responsible for it and there are lifestyle choices that are just as much to blame, if not more so.

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