Biden OMB pick pushed national soda tax, which analysts have called regressive

Study: A soda tax would hit households making between $20,000 and $100,000 per year hardest

President-elect Joe Biden's Office of Budget and Management (OMB) director pick, Neera Tanden, previously pushed for a national soda tax that experts say would have had the greatest impact on low-income households.

Tanden endorsed Democrats' 2019 "Medicare for America" universal health care bill, which aimed to implement a 1% tax per 4.2 grams of caloric sweetener in sugary drinks like Coca-Cola.

"Health care is a fundamental human right, not a privilege. It’s exciting to see this proposal, which guarantees universal coverage, in the Congress," Tanden, who currently serves as president and CEO of the left-leaning Center for American Progress, said in a statement at the time.

Neera Tanden, president of Center for American Progress, speaks during an introduction for New Start New Jersey at NJIT in Newark, N.J.(AP Photo/Mel Evans, File)

She continued: "At the core of Medicare for America are three critical principles: universal coverage, patient choice, and lower costs. This bold, affordable approach is overdue in America. We applaud the progressive leaders today for introducing this landmark bill."

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The Center for American Progress Health Policy Team also published a 2018 plan to guarantee universal health care in the U.S. that included a 50% increase in federal taxes on cigarette packs and a 1% tax per ounce of sugared drinks.

Ticker Security Last Change Change %
KO THE COCA-COLA CO. 60.87 -0.53 -0.86%
PEP PEPSICO INC. 174.03 -1.61 -0.92%
KDP KEURIG DR PEPPER INC. 38.39 -0.89 -2.27%
FIZZ NATIONAL BEVERAGE 43.73 -1.34 -2.97%

"These taxes would reduce health care spending, helping to offset the cost of Medicare Extra," CAP wrote.

Such a tax on sugary drinks would result in a 55-67% tax on a 2-liter bottle of Coca-Cola, which could raise the cost of a bottle from $1.25 to $1.70 or the cost of a 12-pack from $1.11 to $1.44, according to the conservative tax advocacy organization Americans for Tax Reform.

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Additionally, taxes on sugary drinks that aim to improve health conditions can have a regressive effect on low-income households -- particularly those making between $20,000 and $100,000 per year, according to a 2018 report from the tax policy nonprofit Tax Foundation.

Soft drink and soda bottles are displayed in a refrigerator at El Ahorro market in San Francisco. (AP Photo/Jeff Chiu, File)

Tax Foundation researchers found that 78% of tax collections on sugar-sweetened beverages would come from households with incomes less than $100,000. The study also notes that the share of taxes each household pays for sugary drinks drops by .01% for every 1% increase in income, "implying a regressive expenditure pattern."

Independent Vermont Sen. Bernie Sanders has criticized a soda tax, calling it "regressive" in a 2016 interview with NBC.

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"It will be increasing taxes on low-income and working people and at a time of massive levels of income and wealth income inequality, our goal has got to be to ask the people on top to pay more in taxes and not working people,” Sanders told NBC Philadelphia , "I think the mechanism here is fairly regressive."

Tanden has previously been an outspoken critic of Sanders and has clashed online with progressives over policy differences. Sanders has not responded publicly to Biden's decision.

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FOX Business' Megan Henney contributed to this report.