The money's gotta come from somewhere.\nA coalition of health care providers are lobbying for a tax on syrup and powder, two ingredients used to make soft drinks. The money raised by the tax would go toward Indiana's $4 billion Medicaid plan. Predictions indicate that following through with the proposal would raise $164.8 million for the program.\nInitially we all shun away from taxing our goodies to pay for government foibles. We'd like to ask Congress to manage its funds more soundly before asking for money from new sources.\nYet we also know this would be a futile request, and as long as the voters are demanding health care benefits funded by government, that money is going to have to come from somewhere. If the bureaucrats can avoid raising property or other taxes, and if the taxpayers can escape relatively unscathed, we urge them to push forward.\nThe proposed tax on soda ingredients seems to fulfill these desires. The ingredients, or raw materials, used to produce soda comprise one of the least costly portions of production. According to Pepsico's Sept. 2002 quarterly financial statement (given in thousands of dollars), its raw materials comprised only $524,000 of the $23,793,000 it had in total assets. That equates to roughly one-fortieth of the company's concerns. The company's net sales were $6,376,000, contrasting its net costs of $2,907,000 -- showing a markup of clearly over 100 percent. \nCertainly, it appears these companies can afford to bear the burden of a minimal tax on one of their most minimal expenses without raising the prices for consumers. It is far better than an all-encompassing tax increase of the product as a whole (i.e. cigarette tax). This affects consumers by piling an extra cost on the entirety of production. The ingredient tax merely taxes a portion of production, one that seemingly can be absorbed by the company and not the consumer, eliminating the need to change the prices we already see on the shelves. \nFurthermore, it taxes a product with a relatively stable demand. Though we know at the store we can buy cheap soda for roughly 50 cents a can, rarely does it stop one from purchasing sodas in restaurants or vending machines for $1 or more. When we want a soda, we'll buy a soda. Though a price hike seems unnecessary, it would only place a small dent in the usual profit gained by the product. If the companies can't manage to budget such a change and insist in some half-cent to a cent price hike, the consumer will be able to handle it. \nTheoretically then, the plan seems sensible and sound. \nThe bill, however, is not included among the lists of current pending legislation. We feel it should receive more attention and debate.
-- JP Benitez for the Editorial Board
