If you believe
Now two university economists have found levying this sort of tax is the wrong approach. It's much more efficient and effective, argue Matthew Harding of Stanford and Michael Lovenheim of Cornell, to tax the sugar, not the drink. The main reason is that a sugar tax tougher to evade.
There's no question obesity has reached the level of a public health crisis. In their paper for the National Bureau of Economic Research, the authors remind us more than two-thirds of Americans are considered
The idea of a tax on the perceived culprit foods isn't novel. As of 2011, the authors state, 35 states were charging sales tax on soda or imposing an excise tax on the product, distinguishing it from foods exempt from tax. Prohibiting the purchase of sugared drinks with
In Mexico, the government is contemplating a tax on sugared drinks, part of an anti-obesity campaign backed by former New York
Harding and Lovenheim say sales taxes on sweetened drinks are generally ineffective -- the rate isn't high enough to discourage buying them, and because the tax is calculated at checkout, it's almost invisible to consumers.
What about a large tax that shows up in the price? They calculate a 20% tax on sugared soda -- that is, increasing the cost of a bottle of Coca-Cola by 20% -- would cut the total calories consumed by an average 4.84% and sugar consumption by 10%. The authors say that's the equivalent of 16 cans of Coke per month.
A tax on sugar, however, would decrease calories by 18% and sugar by 16%. Because it would percolate through to products with other unhealthful qualities, such as excessive sodium and fat, it would have broader positive effects. And it wouldn't allow consumers to simply substitute one untaxed unhealthful product for a taxed unhealthful product.
It's proper to note here the authors, being economists, don't deal with the practicalities of enacting the sort of tax they study. A sugar tax -- or a fat or salt tax, for that matter -- would generate a huge pushback from the food industry far beyond Coke and Pepsi.
And the beverage sector hasn't taken proposals for soda taxes lying down. Coke, Pepsi and other beverage companies spent $70 million to kill a soft-drink tax in Hawaii in 2012. Coke's chief executive,
Business and political leaders, he wrote, should encourage "greater physical activity and sensible eating and drinking, while allowing Americans to enjoy the simple pleasure of a Coca-Cola." In other words, please drink responsibly. And if you think $70 million is a lot for the beverage industry to spend against a soda tax, imagine what the food industry would spend to kill a sugar tax.