Sugar Tax Not So Sweet

While the price of sugar itself may go up or down, there's one thing that doesn't change from year to year - food and candy manufacturers are paying a lot of taxes for their sugar.

In fact, they pay about twice what their competition is paying overseas.

The sugar tax is decades old, and was originally designed to support sugar beet and sugar cane farmers. Food and candy manufacturers in the U.S. pay around 60 cents per pound for the sweet stuff, while the international competition pays more like 35 cents per pound.

As a result, some big companies like Life Savers have left the United States, regardless of the economic incentives offered to keep them here. It just costs them too much to operate on U.S. soil.

According to Food Industry News, U.S. Senator Richard Lugar of Indiana wants to change this by doing away with the sugar tax. He is sponsoring the "Free Sugar Act," which would eliminate or drastically reduce the tax, and according to the Senator, create jobs.

The idea is, as more manufacturers come back, there will be more jobs in the candy manufacturing business. Food manufacturers could also afford to hire more people on if they weren't paying so much for their sugar.

Of course sugar beet and sugar cane farmers aren't pleased with the "Free Sugar Act," since it would eliminate a lot of their profits. They argue that their industries would lose a lot of employees without the tax.

But Senator Lugar argues that this tax, along with many other Federal programs, is outdated, and hurting the economy more than it is helping. In a time of slow economic growth and high unemployment, his campaign to end the sugar tax is looking sweeter by the day.