Soda taxes slim wallets, not waistlines
Since Philadelphia’s city council approved a 1.5 cent per ounce tax on soda this month, “public health” advocates, led by former New York City mayor Michael Bloomberg, are funding similar campaigns in other cities – with a twist. Philly’s tax was almost exclusively billed as a revenue-raiser, but proposed soda taxes in Oakland, Boulder, and San Francisco are being sold as tools to fight obesity and diabetes. Yet, that claim requires the would-be taxers to run against an inconvenient fact: Soda taxes slim wallets, not waistlines.
Look at Mexico, which enacted a 1 peso per liter tax in 2014. While at first the tax seemed to reduce soda sales, it did nothing to improve consumer health. A survey of 8,000 households by researchers at Mexico’s Autonomous Institute of Technology found the tax had no effect on weight. Most surprisingly, lower income families and those with an obese head of household were the least likely to reduce soda consumption because of the tax. That means the people whose behavior the tax was aimed to influence were the least likely to be “helped.” It also made the tax regressive, as the revenue it generated came more from low-income households.
In addition to Mexico’s experience, numerous studies find that taxes on sugary drinks — even as high has 40% — result in only small changes in weight after a year. And people who switched from soda to other beverages usually substituted it with equally high-calorie products.
A 2012 Cornell University field study, in which half the residents of a U.S. city were required to pay a 10% tax on calorie-dense foods like soda, consumption of soft drinks did initially decrease, but was similar to the non-taxed group by the end of the six-month experiment. What surprised researchers was that in the taxed group, beer sales were higher than before the tax. Yet other studies have found that taxes on so-called “sinful” products may sometimes drive people to purchase other items that may not necessarily be healthier.
But let’s not let facts get in the way of scare-mongering. Soda is an easy target politically. Over the last decade, “public health” activists have hammered the message that sodas are like “liquid candy,” leading Americans to “drink themselves fat,” and are a driving cause of obesity. But the reality is that obesity has risen while soda consumption declined. Soda represents only about 9% of calories consumed by the average American (about one full-calorie soda for a 2,000 calorie diet). This year, soda consumption hit a 30-year low. Yet last year obesity rates in the U.S. hit an all-time high. The roots of the obesity epidemic are deeper and more complex than a single category of products.
Sin taxes are ineffective at helping people manage their weight. If the goal is to improve the health of kids and adults and prevent or reduce obesity, we need policies that enable people to pursue an overall healthy lifestyle that includes a balanced diet. A few effective anti-obesity measures are for kids to get better sleep and watch less television. Another simple route is for families to eat meals together, as studies show, kids who eat meals with adults have a better diet and consume fewer soft drinks.
At best, soda taxes encourage people to cut back on some grocery items to better afford the high-calorie foods and beverages they really want. At worst, they are a sneaky way to extract more money from those who can least afford it.
Originally posted at USA Today.