Hi, I’m Steve Dudash at IHT Wealth Management. Welcome to this week’s Wealthcast. Alright, so we’re going to talk about something that has been debated a lot here in Chicago and it’s really starting to grow across the country, and that is the sugar tax or the beverage tax or whatever they call it. At the end of the day, it’s a tax they’re putting on sugar drinks. And I’m not here to talk about the politics of it, I can argue both sides and I don’t care about the politics.
What I do care about is what it means for you and my portfolios moving forward. But first, let’s explain what it is, if you’re outside of the areas that already have it. It’s a tax they are putting on soda, or pop, or whatever you call it, and sports drinks, things like that. So the Pepsi’s, the Coke’s, the McDonald’s of the world are affected by this. And it’s just like the cigarette tax guys. As soon as it gets started, you know they started this one like 10 years or something, it’s not going away. The states are broke. Chicago is broke. They need money. And once they find a new way of taxing you, it doesn’t disappear, it only grows.
The cigarette taxes were very, very small when they started. Now they are very sizable. And for good reasons. The idea is that it pushes less people to be able to do it. Drink those drinks, smoke those cigarettes. And therefore helps the health costs, which we both know are very, very inhibitive long term. So, I’m not going to debate that part of it. But, what it does mean Coke, Pepsi, McDonald’s, companies like that- make a lot of money selling sugar drinks. It’s going to make it difficult for them to continue that path.
And you need to look at your portfolio and ask yourself- Coke and Pepsi are good companies, I get it- they make a lot of money overseas. But this is going to slow their profitability in the United States. And so, does that still fit in your portfolio? Because if you’re outside of Chicago or Seattle, or they almost passed this in New York too, if you’re outside one of these areas that have been debating this- you might not know this is going on, but it’s coming. It’s coming everywhere else too. So, be aware of it. Check your portfolios and make sure it fits with what you’re trying to do long term.
That being said, next week we’re going to talk about hackers with autonomous cars. We actually wrote an article, I think it was published yesterday in Forbes about the risks that hackers pose on autonomous cars, because again- hackers aren’t going away and autonomous cars are a growing industry, real fast. So if you get a chance, I think the link is on here too- look at that. Either way, hope this helps, have a nice weekend. And if you ever need to get in touch with me- call, email, Twitter @IHTWealth or email@example.com. Thanks. Have a nice weekend.