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Soda Vending Machine - The Tax on Soda, Continued

Soda TaxThe debate of a tax on soda continues on, as two sides clash over a difference of opinion on whether the tax is a good thing, or not. The scope of this soda tax concerns two distinct areas of thought: for state governments, this is seen as a revenue device to fund other projects. But for individuals, well, they are reticent to the idea.

It is also an influential change for soda vending machine operators. Because a tax like this could negatively affect the future sales of a location. Some consumers will walk away from a proposed price hike like this. While the future goals of soda makers Pepsi and Coca-Cola rest on their efforts at green economy, but other parties are concerned that sugary soda is negatively affecting the American populous.

The Real Problem

Price is obviously a key factor in determining the amount of product a company can potentially sell. This is important to understand, because the price of soda has fallen dramatically over the course of 30 years, with respect to inflation.

In comparison, the price of fresh fruits and vegetables has statistically gone up since the middle of the 1980s-do you see a relation here? One of the chief arguments in favor for a tax on soda is the ability for a price hike to curb sales, and therefore, potentially lower the consumption of sugary soda; that would relate to a decrease of obesity, at least that's how the argument is positioned.

So, if we have two ends of the spectrum, where soda is essentially very cheap and affordable for everyone, and fresh fruits and vegetables are some of the highest priced items, then it is not a very large stretch to understand the real problem with obesity in America. Consumers can easily afford sugary soda, but not nearly as much of the healthier food, and that's the bottom line.

It is important to note that there are the statistics that back up this claim of cheap and affordable soda. An average American now consumes roughly three times as much calories from soda, as they did in the late 1970s. On average, a gallon of sugary soda is consumed every week, per individual-teenagers are the largest consumers of soda, overall.

The Soda Tax

Due to the cheap and affordable qualities of soda, the tax is in essence a way to raise the inflated price of the item-if now it is the cheapest, then many believe we should make it more costly to the consumer, to balance out the equation.

The soda tax is usually positioned as a "penny per ounce" tax. This would add around $2.88 on a typical 24-pack of soda, costing the consumer around $9 dollars for the soda.

Additional state tax revenue from this soda tax would go to fund many other projects; most importantly, it could go to the funding of better food for school lunches in America.

The Solution

The soda tax will negatively affect a more price-conscious audience; therefore, people will not eliminate soda from their diet. They will seek a lower cost alternative, say private label soda for example. So, instead of helping the problem of obesity, a soda tax would inherently work against it.

Another issue is that while individuals could reduce their expenditures on soda, even a 50% reduction for the average soda consumer would still result in 96 ounces of soda being consumed every week-still twice the level of soda consumption of the late 1970s.

If state governments need additional tax revenue, they could add soda to the normal sales tax. As of right now, soda does not incur sales tax, and if that change were to take place, state governments would at least have additional revenue that they apparently need.

As for the problem of obesity, it is important to go back to our statement that fresh food and vegetable items are some of the highest priced foods for Americans. It would be beneficial, at least for the fight against obesity, to examine why we have cheapened the system-and furthermore, how we can possibly balance the scales once again.

Contact United Marketing if you are interested in starting your own vending machine business. We have vending machine experts ready to answer any questions you may have.

For additional information on the statistics of this article, please see The Battle Over Taxing Soda on The New York Times.



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