The New American reports on Michelle Minton's study on the failures of soda taxes.
The city of Philadelphia is poised to impose a 1.5-cent-per-ounce tax on sodas and other sugary drinks, supposedly to combat obesity but also to raise revenue for pre-kindergarten education and a variety of other programs. But is it likely to succeed? According to a review of the literature by the Competitive Enterprise Institute (CEI), the answer is a resounding “no.”
While the politicians responsible for the taxes and their cheering sections would prefer to be judged on the basis of their stated intentions — who, after all, could be opposed to fighting obesity? — the fact is that “soda taxes disproportionately affect the poorest members of society while failing to achieve both their stated public health and revenue goals,” wrote CEI’s Michelle Minton.
The theory behind these taxes, of course, is that making something cost more will cause people to consume less of it. That is often true, but, noted Minton, “not everyone responds to price increases in the same way or the same over time.”
For example, a survey of 8,000 households by the Mexico Autonomous Institute of Technology (ITAM) found that Mexico’s 10-percent soda tax, instituted in 2014, had almost no impact on the actions of those it might be expected to affect the most. Those in the lowest socioeconomic strata and those with an obese head of household hardly changed their behavior at all in response to the tax. As a result, “those with the least amount of money are paying a greater proportion of the soda tax, which raised $1.3 billion for the Mexican government in 2014,” penned Minton.
Read the full article at The New American.