In Michigan
4:55 pm
Fri July 31, 2009

Soda pop: to tax or not to tax

EAST LANSING, MI – As the state struggles to balance its budget with declining revenues, old arguments are revisited - such as whether to extend the state's sales tax to soda pop.

Bill Lobenherz is with the Michigan Soft Drink Association. He says the Michigan Constitution does not allow the state to tax soda because soft drinks are food.

"And even if the constitution didn't say it couldn't be done, it's just extremely, extremely bad tax policy," he says. "Good tax policy generally says one, the tax should be constructive and two, it should be equitable. In this case it would be neither."

Lobenherz says a tax on soda would affect sales and hurt bottling businesses in the state. But groups that support a soda tax say the drinks are not nutritionally valuable enough to be considered a food product.

Lobenherz appeared on public television's "Off The Record."