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From the editor: May June 2009

Sweet Taxation


April 30, 2009
By Cam Wood


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Some time ago … and I really do mean some time … there was a governing body across the great Atlantic that decided things were not what they should be in the new world, so they levied a tax.

Some time ago … and I really do mean some time … there was a governing body across the great Atlantic that decided things were not what they should be in the new world, so they levied a tax.

At the time, it hardly seemed to be of great consequence to those in power. They held firm in their belief that “sweet” taxation was the only way to control what they perceived as an out of control situation among the “commoners.”

Under the previous Molasses Act, colonial merchants had been required to pay a king’s ransom of six pence per gallon for the importation of this foreign liquid gold. However, like all good businessmen at the time, they found a way to avoid paying the tax.

Parliament felt the only way to recoup any revenue owed was to rework the legislation, throw on some new levies to related products, and call in the Royal Navy to police the shipping lanes.

And thus was born the Sugar Tax.

Of course, for those following colonial history, you will remember that the Sugar Tax of 1764 was one of the key pieces of legislation that became a motivator for the Declaration of Independence in the United States, and ultimately, the revolution against British control.

These days, sugar has returned to the legislative forefront – or at least has some bureaucrats pushing the commodity towards it. However, unlike the idea of taxation in 1760s to control piracy and illegal trade, this modern manoeuvre seems to be leaning more in the concept of legislating stupidity.

Sugared beverages – soft drinks, sports/energy drinks, vitamin/flavoured waters – have all come under a barrage of criticism lately for their caloric content. Researchers in North America are demanding that legislators implement a new tax to discourage consumption.

Of course, to consumers, this is yet again another encroachment on their rights to make their own decisions.

The medical researchers behind some of the argument state they have seen the impact sugared drinks have on patients – some of who drink in excess of two litres daily. In turn, these same researchers believe that taxation of the products will reduce consumption.

We argue that these researchers must surely be only trained in anatomical science, as they obviously know nothing about the psychology of dependency, individual choice and the human psyche.

Is it the responsibility of beverage makers to control consumption patterns?

Hardly. Capitalism in our society is based on the very raw premise of supply and demand. The people who consume these drinks do so out of choice and the manufacturers provide what the consumers are demanding.

Taxation has only two benefits, as the legislators learned in 1764: it lines the pockets of those in power, and often leads to revolution.

Trust me, change is good. Now, who’s with me?


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