Would a tax reduce sugar usage and obesity or is sugar not the bitter poison as portrayed. For years, public health experts and politicians have argued that adding a tax on sugar would lead to reductions in poor health outcomes. Sugar con…
Would a tax reduce sugar usage and obesity or is sugar not the bitter poison as portrayed.
Teacup with sugar cubes
For years, public health experts and politicians have argued that adding a tax on sugar would lead to reductions in poor health outcomes. Sugar consumption is at higher levels than ever and humans seem to have an unquenchable thirst to consume higher and higher levels of beverages sweetened with this white devil. If you listen to some experts, you will come away with the impression that sugar is as addictive as heroine and we need to protect the public from its evil grip.
I want to believe that this quest to reduce sugar consumption is altruistic in nature, but the truth is that it most likely will not change consumption. Recently, the city of Philadelphia added a tax to soda. It did reduce sales in the city and will likely drive some local, small drink companies out of business, but it has done little to reduce drink consumption overall. Instead, consumers just drive outside the city limits to buy their fix.
It is not just politicians trying to add taxes to sugar purchases, but medical associations and professional organization have begun to advocate for taxes. In recent years, the British Medical Association and World Health Organization have both advocated for sin taxes on drinks and sugar-containing foods. Although not as common in the United States, various state academies to include Vermont and California have been suggesting taxes on this side of the pond.
What are they taxing? Some countries and localities have taxed only sugar-sweetened beverages. Others have added a tax to candy, and still, others have taxed artificially sweetened beverages.
Is sugar addictive? I am confident that it is and I do not need research to prove it. Pick your favorite candy and try to stop at just one. You will quickly eat the whole bag. At least one study indicates that sugar and fat consumption causes opioid receptor stimulation similar to opiates[1].
Will sugar taxes decrease consumption? Yes, this is probably true. I have no doubt that it will reduce sales in the area where the items are taxed. There is plenty of research to indicate that it will lower consumption[2], but I suspect based on prior experiences and statistics that people will drive out of the locality to buy beverages instead of pay taxes. West Virginia used to not see Coors beer and those who wanted it just drove over the border to Ohio to buy it. Those who can afford to drive to purchase will and others will decrease consumption or purchase something different.
Sugar and Spoon
Will taxes reduce obesity? Maybe, maybe not. There is little or no evidence that soda or sugar taxes will reduce obesity. Most of the models that estimate the effect on weight loss overestimate the effect[3]. Soda accounts for about five percent or less of the calories the average American consume. The belief that soda or sugar taxes will make a dent in obesity rates is based on the assumption that the consumer will not replace sugar calories with calories from other foods such as beer, candy, chips, cookies, or pizza. In fact, Mexico added a soda/sugar tax in 2014 and it has made zero dent in obesity rates.
Six Reasons Soda Taxes are a Terrible Idea:
Taxes will not reduce Obesity. See the example above with Mexico where the taxes have had a negligible effect on obesity. In fact, there is evidence that the decrease in consumption may be temporary. A 2014 study cast serious doubt that taxes would reduce obesity and weight[4].
Soda and sugar taxes often miss many foods that are worse for you than soda. I cannot think of a drink that is worse for you than the heavily sweetened blended coffee drinks like you can order at many fast-food and coffee shops. Those frappes have more in common with a dessert milkshake than a cup of coffee.
Taxes hurt consumers and the economy. I have heard many say that the tax will punish the companies or manufacturers. This theory is an incredibly short-sighted view of the economy. Corporations are there to make a profit. They are not going to just roll over, and that hit. Companies will increase prices thus decreasing consumer spending on other items.
Various types of sugar
Taxes lead to fewer jobs. Whenever taxes are used as a way to reduce consumption, you are going to hurt many facets of the economy. Our soda consumption feeds businesses such as convenience stores, movie theaters, restaurants, and soda manufacturers. If you reduce consumption, jobs will be decreased. Sure, the government will have to hire tax agents to enforce the law, but that will never result in the same number of jobs so it will lead to a net loss of jobs.
Consumption taxes hit the poor and middle class the hardest. Consumption is not necessarily different from class to class but higher earnings make taxes more affordable. This means that the poor will either have to stop consuming or buy something else. Most will likely move to another sugary beverage such as fruit juice which may or may not be more healthy.
The tax will raise other costs.Taxes cause inflation because if it cost more for soda indirectly, other products will increase in prices. A study of Berkeley, CA, confirm that taxes would raise prices[5].
The Bottom Line: Soda and sugar taxes won't make anyone thinner. These taxes will hurt the poor more than the wealthy and are more likely to just add to the bureaucracy and feed the taxman. Four additional cities have voted to start sugar taxes of their own. In November of 2016, Albany, CA, Boulder, CO, Oakland, CA, and San Francisco, CA, began their sugar tax. Only time will tell, but if Philadelphia is any indication, they have over-estimated their tax income from the new levy and it will have limited impact on total, soda consumption. It may help children by reducing their exposure, but only time will tell. I suspect that it will only restrict the consumption by the poor and lower middle-class since traveling to purchase soda might be more difficult.
I am not saying that we should not limit our sugar consumptions. We should moderate sugar, but I am just not sold that the vilification and taxes are worth the time and effort.
Footnotes
[1]Avena, Rada, and Hoebel, "Sugar and Fat Bingeing Have Notable Differences in Addictive-like Behavior."
[2]Andreyeva, Chaloupka, and Brownell, "Estimating the Potential of Taxes on Sugar-Sweetened Beverages to Reduce Consumption and Generate Revenue."
[3]Lin et al., "Measuring Weight Outcomes for Obesity Intervention Strategies: The Case of a Sugar-Sweetened Beverage Tax."
[4]Fletcher, Frisvold, and Tefft, "Non-Linear Effects of Soda Taxes on Consumption and Weight Outcomes."
[5]Falbe et al., "Higher Retail Prices of Sugar-Sweetened Beverages 3 Months After Implementation of an Excise Tax in Berkeley, California."
Andreyeva, Tatiana, Frank J. Chaloupka, and Kelly D. Brownell. "Estimating the Potential of Taxes on Sugar-Sweetened Beverages to Reduce Consumption and Generate Revenue." Preventive Medicine. Elsevier BV, June 2011. doi: 10.1016/j.ypmed.2011.03.013
Avena, NM, P Rada, and BG Hoebel. "Sugar and Fat Bingeing Have Notable Differences in Addictive-like Behavior." The Journal of Nutrition 139, no. 3 (March 1, 2009): 623–28. [PubMed]
Falbe, Jennifer, Nadia Rojas, Anna H. Grummon, and Kristine A. Madsen. "Higher Retail Prices of Sugar-Sweetened Beverages 3 Months After Implementation of an Excise Tax in Berkeley, California." American Journal of Public Health. American Public Health Association, November 2015. doi: 10.2105/ajph.2015.302881
Fletcher, Jason M., David E. Frisvold, and Nathan Tefft. "Non-Linear Effects of Soda Taxes on Consumption and Weight Outcomes." Health Economics. Wiley-Blackwell, March 10, 2014. doi: 10.1002/hec.3045
Lin, Biing-Hwan, Travis A. Smith, Jonq-Ying Lee, and Kevin D. Hall. "Measuring Weight Outcomes for Obesity Intervention Strategies: The Case of a Sugar-Sweetened Beverage Tax." Economics & Human Biology. Elsevier BV, December 2011. doi: 10.1016/j.ehb.2011.08.007
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