About that ‘health impact’ tax

There have been several letters to the editor recently commending the CNMI Legislature for passing such a law and touting the various supposedly “good” effects such a tax will render to the community.  Of course, none of the “bad” effects are mentioned—at all.

Well, there are some “bad” effects, most of them economic and aimed squarely at the business community and your pocketbook.  Besides, shouldn’t one’s “health” be a matter of one’s personal and private body? Oh, you may argue that one’s “health” does affect other people and the community as a whole. Especially cited are the effects of healthcare as it impacts the cost of such care for all—and, yes, that is an important benefit for any community; that is to have a “healthier” population.

But is the role of government such that it shall deem itself to be the protector of one’s body through controlling what we eat and drink by means of making those items so costly as to preclude their availability to the average person?  Or is the real reason simply more sinister: to find a way to increase the coffers of a cash strapped government gone awry by sneaking in a “tax” under the guise of being “good for you?”  Well, the intention of this letter is not to argue the validity of such a law or even the health aspects of it, but rather to give you a little insight into the nitty-gritty of what this law will do to the business community and more importantly, to your budget.

The business community can mostly speak for itself (and it no doubt will), but we all know such a law will impose huge headaches and nightmarish avalanches of paperwork; and that’s just to figure out what products are “taxable” and how much tax is due—not to mention the reporting and remitting of it. And then there’s the government’s own “inspection” of the books and tracking. Will the CNMI be able to field “inspectors” capable of figuring out this nightmare, let alone enforcing (accurately) its provisions? I seriously doubt it!

Well, let’s get to some of that nitty-gritty: There are thousands of “sugar sweetened” drinks on the shelves, including all the well-known “soda-pops” and the multitude of them sold under various store brand names. So, I won’t bother to include those in my list, but here a few of the more popular “drinks” you will soon be paying a lot more for—ranging from $0.48 cents to $5.12 per container more:

Mike’s Hard Lemonade; Vanilla Soy Milk (and all soy and nut milks); Nesquik Chocolate milk; Capri Sun Drinks; Apple Juice; Orange Juice (most brands); Minute Maid Lemonade; Snapple; Arizona Lemon and Tea Drinks; Vitamin Water(s); RED BULL; Rockstar, Monster and ALL “energy boost” drinks; McDonald’s McCafe; Gatorade and all “sports” drinks; Sunkist Drinks; Hi-C; Hawaiian Punch; Sunny D; Ale 8 1; Iced Coffees; Boost, Glucerna and Ensure; Café Mocha and Cappuccino; Chocolate Milk; Hot Cocoa; Lipton and Nestea drinks; Slurpee; Tonic Water, and V-8 Fusion.

That’s only a very few of the commonly found grocery store carried drinks. But, you think that’s bad? Wait till you see the difference this tax will make on the second category it purports to control: syrups and powders. The law states that the $0.04 cent per ounce tax shall apply “to the largest volume of beverage produced from the use of a syrup or powder when used according to the manufacturer’s directions.” And here are only two of the most common:

1. A Syrup: Hershey’s Chocolate drink mix. A 48-ounce bottle of this mix costs about $4.00 at Sam’s Club here—it will undoubtedly cost more in the CNMI.  That bottle will make 35 – 8 ounce glasses of chocolate drink—that’s 280 ounces of beverage. At $0.04 cents per ounce, that translates to a tax of $11.20—per bottle!

2. A powder: Tang Juice drink mix. A 72-ounce canister costs about $7 at Sam’s Club here—and, once again, it will undoubtedly cost more in the CNMI. That canister makes about 22 quarts of drink—that’s 704 ounces. At $0.04 per ounce, that translates to a tax of $28.16—per canister!

Now, does ANYONE still believe the CNMI Legislature actually has your best interest at heart? Do you believe they actually researched these issues? Did they hold public hearings and, if so, did any of the people who may have spoken there know what they were talking about?

So, under this law, as poorly written as it is (and overly simple), are you now prepared to either pay through the nose, not only for the target drinks (“soda-pop”) but for just about everything else on the shelf—even the ones that supposedly DO have some “health” benefits—or simply do without much to drink except water? Of course, the consumption of only water actually is beneficial, but do we all always drink only what’s “beneficial” to us? What about those of us who are healthy but living on a fixed (and tight) budget?

This “law” needs to be carefully discussed and considered before it is actually signed by a governor who probably has little or no idea of what the consequences will be to all of the community.

Dr. Thomas D. Arkle Jr.
Formerly of Tinian