Senate Mulls 'Lifestyle Tax' on Soft Drinks to Pay for Healthcare Reform

John Commins, for HealthLeaders Media , May 19, 2009

Imposing a "lifestyle tax" on sugary, fattening soft drinks and alcohol are among the revenue-generating ideas under consideration by the Senate Finance Committee as a way to pay for healthcare reform.

"Reforming the system will likely require an upfront investment, but I'm confident it will pay dividends in the future for our health, our economic competitiveness, and our federal budget," says Committee Chairman Max Baucus, D-MT. "The bottom line is that we can't afford not to act. Without healthcare reform, healthcare spending will reach $4.4 trillion by 2018. These policies lay out a wide variety of options for making that investment."

The proposals unveiled Monday are the final set of policy options being considered before the Finance Committee begins to craft a bill in June. Previously, the committee has discussed how to reduce costs in the healthcare delivery system, while improving quality and expanding access.

The latest round of proposals focus on savings achieved from within the healthcare system, reevaluating health tax subsidies, and changing non?health tax provisions.

The Finance Committee will take up the suggestions at a hearing on Wednesday.

The lifestyle tax would slap an excise tax on soft drinks sweetened with sugar, high-fructose corn syrup, or other sweeteners that "contribute to obesity which drives up healthcare costs within the system," the committee proposal states, adding that the tax would "expand on what some states have already done." The tax would not apply to artificially sweetened beverages.

Alcohol excise taxes would increase from $13.50 per proof gallon to $16 per proof gallon. A press release announcing the proposals did not include estimates for how much money the taxes would generate.

John Commins is a senior editor with HealthLeaders Media.

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