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Aldermen Discuss Proposal To Tax Sugary Soft Drinks

Soft Drink Tax

Ald. George Cardenas (12th) wants a higher sales tax on soft drinks. (Credit: CBS)

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UPDATED 05/01/12 – 8:13 p.m.

CHICAGO (CBS) – Experts on both sides of a proposal to impose an extra tax on soft drinks and other sugary beverages poured out their arguments for the City Council’s Health Committee on Tuesday.

“Taxing certain foods or drinks is really not the right approach,” said nutritionist Lisa Katic, who represented the American Beverage Association during a hearing of the City Council Committee on Health and Environmental Protection.

But Elissa Bassler, CEO of the Illinois Public Health Institute, said “People don’t understand really how harmful these are to your health.”

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Ald. George Cardenas (12th), whose proposal for a soft drink tax spurred the hearing, says there are several tax options that could be on the table: a bottle tax, an excise tax, but not a sales tax levied at the register.

“But that [tax] was not really the idea. The idea was to look at policy and look at what works,” he said. “And the policy that works is the one that we want to go after.”

He and supporters of a tax say, if done correctly, it can have an impact on obesity rates.

But opponents, like the American Beverage Association, say sugary drinks alone aren’t the cause of obesity, and a tax is all wrong.

“It’s everything that has has to happen all at once. We have to look at the other side of the equation,” Katic said. “If you look at the statistics on physical activity, they are abysmal, in adults and children, and some need anorexia and bulimia help.”

She adds the institute has done plenty to impact obesity, like taking sodas out of school vending machines.

Bassler says research shows that buying behavior can be influenced through an excise tax, where the tax is levied at the price on the shelf, versus at the cash register, like a sales tax.

“That’s where you do in fact see an anticipated outcome, but we haven’t had that kind of tax before, and I think that what some folks said is that Chicago can be a leader here,” she said. “We have one of the worst obesity rates, especially childhood obesity rates, in the country.”

Published reports say if the tax hike proposal were to go ahead, state law would have to be changed so Chicago could raise its tax higher than the current 3 percent.

Some estimates say just a 1 percent increase would raise $187 million.

Cardenas was also behind a tax on bottled water, which went into effect on Jan. 1, 2008.