Sunday, January 11, 2009

A Tobacco-Style Tax on Fattening Drinks

Gov. David Patterson of New York is proposing to levy a tax on non-diet soda and sugary juice drinks.

Americans need to drink less *&$(ing soda for sure. The problems with this measure are that a) the carbonated drink industry (Big Soda?) is going to oppose this vociferously and b) it's not certain that this will work as well as tobacco taxes. Tobacco is physically addictive and has no substitutes. People may well substitute sodas with other drinks that aren't taxed, or perhaps with food. While obesity needs to be tackled, it isn't certain that this intervention will work. That said, others have tried it, just not on the same scale.

Paterson's proposal wouldn't, in fact, be completely precedent-shattering. A recent study by the Institute for Health Research Policy at the University of Illinois at Chicago found that at least 27 states impose taxes of 7% to 8% on junk food such as candy, soda, and baked good snacks, usually imposed when the products are sold through vending machines. Such levies are barely noticeable on food items that cost only a dollar or two.

There is also the political issue: he may not be able to pass such a tax.

Selling a sweet- and salt-loving American public on such a tax won't be easy, however. A Quinnipiac University poll released in late December found that 60% of New York State residents oppose Paterson's proposed tax on sodas, including 58% of those who say they prefer diet drinks over regular soda. And in November, Maine voters overturned a wholesale tax on bottled sodas as well as on the syrup used to make soda, which was signed into law the previous April.

Brownell suggests that such tariffs would be more palatable if they were labeled a "nutrition tax" rather than an obesity tax. "Ideally the money raised would then be used to subsidize healthier foods such as fresh fruits and vegetables. That would get around the issue of it being a regressive tax."

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