Tax My Soda, Please

David Leonhardt makes a compelling case for the soda tax in the New York Times today, noting that as the price of sugary drinks has fallen relative to the price of healthy foods, consumption of the bad-for-you soda skyrocketed. Indeed, the inflation-adjusted price of fruits and vegetables rose 17% between 1997 and 2003, while the price of Coca-Cola fell by an astonishing 34.89%. All this has resulted in higher obesity rates and increasing health care costs:

Sugar-sweetened beverages …may be the single largest driver of the obesity epidemic. A recent meta-analysis found that the intake of sugared beverages is associated with increased body weight, poor nutrition, and displacement of more healthful beverages; increasing consumption increases risk for obesity and diabetes; the strongest effects are seen in studies with the best methods (e.g., longitudinal and interventional vs. correlational studies); and interventional studies show that reduced intake of soft drinks improves health. Studies that do not support a relationship between consumption of sugared beverages and health outcomes tend to be conducted by authors supported by the beverage industry.

As price of soda has fallen:

Consumption of soda has increased:


The beverage industry is busy sponsoring its own contradictory studies and pushing the meme that a tax on soda is by nature regressive (the industry spent at least $18 million to keep a tax out of federal health reform and is now spending more in the states), an argument which only makes sense if you ignore or discount the fact that obesity disproportionately affects the poor and that taxing soda would help reduce consumption (if it’s high enough), improve health outcomes among this population, and raise much-need revenue. As Leonhardt observes, “Someday, we will probably look back on our gallon-a-week soda habit the way we now look back on allowing children to ride without seat belts or listening to doctors who endorsed Camel cigarettes. We will wonder what we were thinking.”

Thirty-three states already levy a sales tax on soda (39 states levy a tax on soda in vending machines) and the President’s White House Task Force on Childhood Obesity makes a relatively weak pitch for the idea. Recommendation 4.9 suggests that policy makers should merely “analyze the effect of state and local sales tax on less healthy, energy-dense foods.”

Today’s Progress Report has more on the Task Force and the obesity debate.