Sodas a Tempting Tax Target
Taxes have little effect on this sweet habit
By Walter Brooks
"A tax on sugar to fight obesity.
Is probably the best thing to do at least-ity." - Blogfather, 2009.
"Sugar, rum and tobacco are commodities which are nowhere necessaries of life, which are become objects of almost universal consumption, and which are therefore extremely proper subjects of taxation." - Adam Smith, The Wealth of Nations, 1776.
That quotation, from the great philosopher of capitalism, appeared at the start of an article that ran a few weeks ago in The New England Journal of Medicine. The article argued for taxing Coke, Pepsi, Gatorade, Red Bull and any other sugar-sweetened beverage, largely to combat obesity.
The authors were Kelly Brownell, a longtime obesity researcher at Yale, and Thomas Frieden, the New York City health commissioner. Since the article appeared, President Obama appointed Dr. Frieden to lead the Centers for Disease Control and Prevention.
So one of the nation's top public health officials is now a fierce proponent of a soda tax. Meanwhile, other Obama advisers and some Senate staff members have been talking about such a tax - which wouldn't apply to diet soda or real juice - as a way to help pay for expanded health insurance. Among 15 options for paying for health care reform, a new Senate Finance Committee analysis lists a "sugar-sweetened beverage excise tax."
Coca-Cola and PepsiCo hate this idea, of course, and they're fighting hard (if quietly) against it... NY Times.
Massachusetts' Proposed Tax on Sweets May Not Dampen Demand
John Auerbach, the Massachusetts public health commissioner, acknowledged in an interview that the main objective of the sugar tax is revenue generation, not behavior modification. The $43.5 million the state expects to collect annually from taxes on candy and soft drinks -- both regular and diet varieties -- would go to a fund for public health services, including community health centers, dental care, and violence prevention.
When Massachusetts Gov. Deval Patrick proposed a 5 percent premium on sugary treats last week, his administration called it a sin tax with a bonus: The levy, a briefing paper stated, would be "a critical first step in discouraging the consumption of these empty calories," according to a report in the Boston Globe.
But there is little evidence that an extra nickel or dime for a candy bar would significantly dampen demand for products blamed for fueling the nation's obesity epidemic, the newspaper reported.
Chicago researchers who studied the effects of state tax policies on consumer behavior concluded that modest fees on candy and soft drinks produce equally modest effects on waistlines and consumption. "If the state's purpose of a 5 percent tax is to drive down the obesity rate, then that's an overstatement of what it's likely to do," Frank Chaloupka, director of the Institute for Health Research and Policy at the University of Illinois at Chicago, told the Boston Globe. "The bottom line is that the taxes are really too low to significantly affect obesity." States big and small, from California to Rhode Island, tack a surcharge onto soft drinks and candy. In all, 33 states have sales taxes on soda or candy as of Jan. 1, 2008, with most rates hovering between 4 and 6 percent, according to the report... Convenience Store News.