Wednesday, September 23, 2009

The Argument Against Soda Taxes

I've been asked to weigh in on the soda tax debate by someone from For perspective, here's their 3-minute recap of the arguments for and against the tax:

I'm against an end-user soda tax. It's a regressive tax. It disproportionately affects the poor1 and minorities.2

Go into poor urban areas and note what foods are available. Sweetened beverages, chips, candy, and snacks. These residents have limited choices. There aren't supermarkets here, let alone farmers markets. I might go along with the tax if fresh, local, organic food was available here, everywhere, at affordable prices. Let's fix that first. Let's make sure people have a choice before we tax their options.

Also, those in lower socioeconomic classes should have a say in whether this tax gets approved, especially because they end up paying proportionately more of it. I can't help but see this tax as being levied upon those who don't have the political or economic clout to fight it.

And then ... Why tax soda? Why not tax meat? Hasn't that also been linked to poor health? And we know it's ransacking the environment.

Or let's tax fresh, local and organic food. The people who buy these can arguably afford a tax more than the people who buy soda.1 We could use the money to provide more fresh, local and organic food to underserved areas, and to offset the price. We could use the money to increase funding to SNAP (food stamps), which covers only 3 weeks out of the month.

Or, instead of taxing the output (soda), tax the inputs (high fructose corn syrup, sugar). I think that would distribute the burden more evenly. And it wouldn't let manufacturers off the hook.

Along those lines, how about removing the subsidies for growing commodity crops that get turned into corn syrup and other cheap refined junk foods? You could raise a pretty penny there. (Oh, the irony of subsidizing and then taxing the same foods.)

How about a carbon tax? Carbon emissions are terrible for health, and the planet.

The poor suffer higher rates of obesity. This "obesity tax" is quite clearly a tax on the poor. If you are looking to a soda tax to "raise billions of dollars in revenue that could be used to fund healthcare," you are looking to fund healthcare on the backs of people who can least afford it. Is that ethical?.

It's unfortunate that my opinion puts me on the bench with companies that manufacture junk food, or that my opinion sounds like I agree with those who decry a "nanny state." I don't typically align myself with either group.
1 Does Social Class Predict Diet Quality?, American Journal of Clinical Nutrition, 2008
2 Sweetened Beverage Consumption Increases Dramatically In US, ScienceDaily, 2008
"Among race/ethnicity groups, the percentage of sugar-sweetened beverage drinkers and per capita consumption of sugar-sweetened beverages was highest among blacks followed by Mexican Americans."


EldoubleVee said...

Since it won’t affect me then it is OK to tax soda. Since it will only affect stupid, poor fat people then it is OK to tax soda. If a tax would affect me, like a gas tax, even though it would make lots of sense but it could cost me a little money, then avoid it. As long as you can raise revenue to benefit me but not cost me anything then it is OK to do. Isn’t that the argument? Expensive gourmet restaurants that serve meals containing an enormous amount of fat and calories that cause people to be obese should be heavily taxed plus they are frequented by people who can afford to pay the tax. Do you think that is going to happen? Sport event venues serve food that is justly called food porn should be heavily taxed. Won’t happen. Every fast food restaurant serves food that is calorie dense and nutritionally light and therefore should be taxed. Fast food restaurants who advertise on TV incessantly should pay a tax on each commercial plus a tax on the increase in business caused by the commercial. Supermarkets with aisle after aisle of overly processed cheap foods should be taxed. Gas station mini-marts selling total crap food should be taxed. Movie concession stands selling way, way over priced items that are barely food should be taxed. Mall stores selling enormous fat and sugar laden pastries should be taxed. Many, many corporations who make nothing but value added overly processed snack foods should be taxed to death. Won’t happen ever. Only the poor who have very little political clout and who are victims of the corporations pouring their crap food into their neighborhoods will pay the price.

How about stopping advertisements of nutritionally deficient products. Why are these products produced in the first place? They are an enormous source of profits for the corporations who make them and these corporations should be held accountable for flooding the marketplace with products that are injurious to people’s health. If you get lung cancer from breathing in polluted air do we tax the cancer victim for getting sick? If you own a company that produces a product that is known to cause harm the company is liable for the damages caused by their neglect. If a car is produced that contains a defect and the company knows about it then that company is criminally liable for injuries cause by that defect. Why then isn’t a food company liable for the obesity their product causes? Why tax the end user? If you want to raise revenue how about taxing engine horsepower or displacement so we would use less gas and promote smaller displacement and more efficient vehicles. How about removing the corn subsidies? Won’t happen. How about taxing poor fat dumb asses who won’t make a fuss or cost politicians any political capital. Ka-ching!

caulfieldkid said...

I think Vee's last sentence is, essentially, correct.

1. The idea is easily sold to the general, voting population. It sounds good. It sounds like it's an easy change to help "fix" the problem.

2. It would generate a lot of tax revenue.

Here is what I am curious about: Do those in government, who propose it, really believe it will help, or do they know this is just an easy way to raise taxes? Maybe they are just self delusional? I'm trying hard not being cynical Bix. I want to believe they really are trying to help. If so, I hope they realize this is not the way to do it.

virginia said...

"Let's make sure people have a choice before we tax their options."

A solid and thoughtful argument, that made me change my mind.

Steve Parker, M.D. said...

The U.S. state and federal governments are already mis-managing billions of our dollars. Why give them any more?


Anrosh said...

lets close down the soda companies and encourage drinking water. and stop the bottle mania. that will do good in many ways.

- calorie cuts without huffing and puffing on the treadmill ( no gym fees either. double benefits )
- drinking water, good for the body- flushes toxins etc etc
- less visit to the dentists due to less or no sugary stickiness on your teeth.
- brings down obesity with no charge.

benefits for drinking water - multifold

Ben P. DaSalt said...

Agreed. On every point.

I’m not a right wing conservative or libertarian type either but this is a perfect example of a government cash grab that is easy to get passed and has a mild association with health (and I'm being generous). This is so abundantly clear from the attempt in New York when doomsday budgets were in the headlines and the G=governor was looking to squeeze money from anywhere.

I don’t hold it against Governor Paterson, he was put at the helm of a sinking ship when Spitzer resigned and the economy went in the tank. He was grasping at whatever he could to keep the state fiscally afloat. If I was him, I probably would have tried for a soda tax too, easy money that could be rationalized as a beneficial public health measure. I’m honestly surprised that it didn’t pass, but I suppose it really was that transparent.

It’s not even that I’m against a soda tax outright, it’s just that there are many more important issues to address with the overall system that would be far more effective before getting into taxing away at things. Not that we can’t use more tactics at once, but a soda tax is questionable in the first place and may be superfluous if energy and resources were instead directed at the source of the problem.

If it is an attempt to curb obesity or improve health, it’s hacking at the far outer branches, when we need to strike at the roots. SUBSIDIES.

But politicians don’t want to touch it because there’s so much money, industry, and lobbying involved (hmm, why does this sound so familiar?), which is exactly why it needs to be brought to the table for reform.

Oh, and we should probably just open up the market for international sugar producers, free trade and all that. If cheap foreign sugar threatens to flood the US and undermine health we can talk about tariffs and taxes then.

RB said...

I like the idea of a soda tax. I think the subsidies on corn (HFCS) and soy should be ended first. The subsidies could either be redirected to healthy food (fruit & veggies) subsidies, better and nutritious food in the school lunch programs or just a cost savings to the government. The tobacco subsidies should be ended too (although this has nothing to do with soft drinks.) (I include diet soft drinks since I think the artificial sweeteners are bad and they re-enforce are appetite for sweet foods). (BTW, eliminating corn subsidies would also make meat more expensive so we would probable consume less, reducing meat production and its impact on the environment and our health).

As far as a soft drink tax hitting the poor disproportionally, they just might go to drinking more tap water. Tea and coffee,especially if made at home, are an economically alternative. They would also probably be healthier for it.

100% fruit drinks like orange juice and apple are not necessarily a more expensive alternative. Sure a 20 oz. coke cost less than a 20 oz. orange juice (btw, apple and orange can be found in the food desert). However, orange and apple juice are more satisfying so one drinks less (saving money) and get some good nutrition to boot.

Since I stopped consuming soft drinks and candy years ago I am able to control my weight, I feel better, I don't get nearly as many headaches. I replaced soft drinks with coffee, tea and water. I now use fruit for stacks.

We need to find ways to discourage soft drink consumption. Tax them, end subsidies of corn (HFCS) or find another way. We need to do this for our health, wealth and environment.

Bix said...

EldoubleVee, I have to agree. And I second shaun, your last sentence clinches it.

Ben, interesting point about letting sugar in, which would lower its price, which would make it a good cheap alternative to HFCS, which would make taxing corn syrup moot.

Someone I know calls politicians chameleons. They'll rally for whichever group gets them elected. Maybe that's what they're supposed to do? I don't know, but if so, that would throw responsibility back on the electorate.

Mia said...

You've totally hit the nail on the head, I couldn't agree more. As tax historian Joe Thorndike just said yesterday, "let's stop the madness"

coleenehanson said...

Great blog - check out my perspective which falls in nicely with yours...

Cheryl said...

Think of it as an alcohol tax.
1. Soda is actually correlated to increased weight gain and increased weight gain is correlated to MANY chronic health diseases. So safe to say, its bad for you-just like alcohol.
2. It is not a necessity. No person needs soda, nor does it provide adequate nutrition. While it may provide Calories, excess intake of calories does not prevent a person from experiencing hunger. (yes a person can be obese and hungry). Most people in impoverished areas already take in excess calories sans soda. So like alcohol-its a luxury.
3. Nutritious food is scarce in impoverished neighborhoods, but soda is widely available. Just like liquor stores.

On another note, while the tax may take an option away from impoverished people, the decrease in soda may decrease their healthcare costs and also, help the government provide better healthcare to them.
Also, people are adamantly trying to find a solution to food deserts.
I hope that helps you see some of the holes in your arguments. I really would like to write more.

Bix said...

Hi Cheryl,

Why do you think that I don't understand that soda is not a health food? Let me be frank ... soda is not a health food.

I don't argue any of your points 1., 2., or 3. I especially don't argue that third one.

What I would like to understand is why society is trying to tackle a problem by penalizing the poor. Why don't we give money to the poor instead of taking money away?

Think about it.

I think a soda tax will turn out to be a moot point anyway. Manufacturers will just absorb the cost so they can continue selling their cheap food to people who don't have options.