Politicians are running around proposing taxes on “sugary drinks” to “protect our health”. This notion has a similar story in our past and could point to where this idea ends.
After the Civil War, folks in France came up with the idea of making a butter-like food substance from vegetable oil called “artificial butter”. Dairy interests in the United States rushed to demand more government regulation to protect their business model by banning margarine or requiring special taxes or otherwise preventing or discouraging its sale. The State of New York created an outright ban on margarine, which the U.S. Supreme Court voided in 1885. Congress and President Grover Cleveland (of New York) quickly passed the “Margarine Act of 1886”, which imposed a federal tax on margarine and required licensing and otherwise trying to interfere with what consumers wanted to buy.
My father was born in 1905 – he told me as a child how when we was growing up, there was a law that made it illegal to sell margarine that was yellow. Since people generally wanted their butter-like substance to look yellow, “Oleomargarine” was sold as white, and the banned yellow coloring was included as a capsule that had to be mixed into the margarine. 32 states had bans on yellow margarine by 1902. Congress raised the Margarine tax, but people continued to buy more and more margarine. Illegal yellow margarine flourished. During the Depression, the dairy interests forced a law requiring margarine to sell for the same price as butter. It wouldn’t be until 1950 that Harry Truman signed a new Margarine law undoing the government interference in the marketplace, although it would be 1967 before the last margarine laws were repealed in Wisconsin. It wasn’t until the last 10 years that the dairy industry was able to invoke “science” to get the Federal Government to declare TransFats a public health hazard and have them removed from the food supply. So now, to avoid running afoul of the law, food requires you to add your own butter-like substance during preparation.
So what does this have to do with Congress taxing sugary drinks? Overlooking the fact that Orange Juice has more calories than Coca Cola, if a truly punitive tax was put on “sugary drinks”, how would the marketplace react? Instead of buying soda, people might decide to buy Kool-Aid and made the “evil” sugary drinks in the privacy of their homes. Soda made without sugar (like Diet Coke with that healthy chemical Aspartame) would sell at a discount to soda with sugar or HFCS. Or perhaps we will see a resurgance in the sale of home carbonation devices and people would buy unsugared Coca Cola syrup and make it at home.
So if we have a tax on “sugary drinks”, then we also need a tax on drink mixes that include sugar. If you close that loophole, then Kool-Aid will return to selling unsweetened packets [Walmart carries them for $.20 today] without the evil sugar, and then people will mix the contraband “sugary drinks” in the privacy of their homes (until the DEA invokes its emergency powers to ban Kool-Aid drink mix). The only way to ultimately stop people from drinking what they want is to tax or limit access to sugar. I bet we could find a terrorist who can theoretically design a bomb made from sugar. We must protect the children, after all. Anyone buying more than a pound of sugar will need to show picture ID and be logged into a Federal database (unless they’re in the country illegally, of course).
Am I exaggerating? Tried to buy caugh medications with Dextromethorphan (DXM) lately?
Amazing … I actually remember the little reddish-orange tablet packed into the center of a plastic-wrapped pallid lard-like wad of margarine and joining in the fun of squishing it all around until the tab dissolved more or less and the whole glob turned yellow. Thanks for the memory, Art. Maybe some pennroyal tea, honey and bourbon will help with the cough. Or maybe just the bourbon.