Taxes Can’t Do It Alone. But They Can Help.

That obesity is a major U.S. public health problem is not a subject of much dispute. With more than a third of adult Americans now counted as obese, the costs to this country both in terms of preventable adverse health outcomes (including heart disease, stroke, and diabetes, among many others) and actual dollars spent (which approached $150 billion in 2008) are substantial. Any measure that has a significant impact on this complex, seemingly intractable problem would be a boon to both our collective well-being and our pocketbooks.

In his essay “The Ineffectiveness of Food and Soft Drink Taxes,” Christopher Snowdon casts doubt on the role soda taxes should play as part of the effort to combat obesity. While he is right to question whether such taxes as a stand-alone method may have much impact on the problem, it is unrealistic to expect any one intervention to have a sizeable effect on a challenge as multifactorial as this. Soda taxes can play a meaningful role in the fight against obesity, particularly when the revenues are appropriately applied.

Snowdon correctly notes the basic physiology of obesity, which is caused when caloric intake is chronically in excess of expenditure. However, he seems to think that all calorie sources are roughly equivalent and easily swapped around. While it is technically true that excessively eating or drinking almost anything can lead to obesity, not all foods are equal in this regard. (One pauses to consider the truly heroic commitment to kale consumption necessary for its intake to be an obesity risk factor.) A standard bottle of soda contains hundreds of calories with nary a nutrient to keep them company, and sugared beverages produce very little satiety. While I agree that taxing calories as a whole would be problematic on many levels, and that the association between soda intake and obesity is not as strong as that between tobacco use (another product taxed for public health reasons) and lung cancer, the association between these entirely empty calories and obesity is certainly strong enough to make them a fitting target for taxation.

In downplaying the potential effect of soda taxes on obesity, Snowdon suggests that consumers will simply switch to an alternate form of liquid calories. Pepsi drinkers will just become drinkers of beer, milkshakes, or juice. But this argument is belied by actual experience. Consumers of soft drinks and the contexts of their consumption vary greatly from those of the proposed alternatives. It takes no more preparation to drink a soda than opening its container, unlike the significant effort necessary to whip up a milkshake, to say nothing of having the ingredients and equipment on hand. And I can drink a thousand calories’ worth of Mountain Dew at my desk over a workday without raising an eyebrow, which cannot be said of the same volume of beer; it is very rarely Miller Time in any given office.

Further, there remains a particular concern about soda intake in children and adolescents. Soda is a significant source of empty calorie consumption for both age groups, though sugar-sweetened juices and “sports beverages” also warrant scrutiny. Childhood and adolescent obesity is a significant predictor of obesity into adulthood, and interventions targeting these age groups may help prevent the long-term sequelae of being overweight later in life. Data on the specific effect of soda taxes on intake in young people are limited. However, there is some evidence that coupling soda taxes with removing from schools the vending machines that sell it, which otherwise has the surprising outcome of increasing students’ consumption overall, neutralizes this effect. And even one of the studies Snowdon cites demonstrating no reduction in obesity from soda taxes showed that said taxes disincent children and adolescents from drinking soda in favor of other, more nutritionally beneficial sources of calories, including whole milk. While perhaps unrealistic to expect soda taxes as a stand-alone policy to reduce obesity in younger populations, they may yet play a useful role in more comprehensive public health campaigns, particularly ones that also include other popular sugar-sweetened beverages, such as sports beverages, within their ambit.

Snowdon concedes that soda taxes may simply have been too low to effect much change in obesity rates, and another of his citations notes that most such taxes have been designed for the purpose of generating state revenue rather than curbing a public health epidemic. While Berkeley’s soon-to-be-enacted soda tax was approved with the latter goal in mind, even the data that follow from its one-city experiment should be viewed with some caution. Just as I can circumvent my state’s liquor taxes by purchasing my gin in nearby New Hampshire, motivated soda drinkers may simply pop over the border to Oakland. While the cent-per-ounce tax might be sufficiently onerous to lower consumption, a broader geographic scope might well enhance efficacy.

The issue of where the funds generated from such taxes would go is one that deserves due attention. But that is hardly an argument about the taxes per se, merely a call to be cautious about where the revenues go. Vague reference to bureaucrats and pressure groups as possible recipients elides the existence of programs that can have a meaningful long-term impact on the prevalence of American obesity. (Head Start, for example, looks promising in this regard.) The importance of distributing the cash wisely is not a reason not to raise it at all.

In questioning the efficiency of proposed soda taxes in the United Kingdom, Snowdon makes reference to some rather peculiar math. A group advocating for such a tax has averred that it would save Londoners £39 million over 20 years. Presumably this is because the UK’s largest, richest city subsidizes much of the country’s health care, similar to how tax money from affluent urban areasoften flows to rural ones in this country, and reducing the cost of treating obesity will flow back to them in tax savings. But Snowdon’s own Institute of Economic Affairs pins the cost to Londoners at a whopping £2.6 billion. They arrive at this figure by taking the projected cost of the tax to the UK of £1 billion per annum, multiplying by 20, and calculating that since Londoners make up 13% of the nation’s population, they will thus pay 13% of the price. But that assumes the citizens of the city comprise a homogenous mass of soda-drinkers, and that none of the roughly 17 million foreigners who visited last year (to say nothing of domestic travelers) ordered a Coca-cola during their stays. It may be that savings from a soda tax aren’t as clear-cut as advocates claim, but the discussion calls for a more sophisticated cost-benefit analysis than the one Snowdon provides.

Arguments that soda taxes unfairly target lower-income people are deserving of consideration. It is true that those in lower socioeconomic groups are more likely to consume soda, and would thus bear more of the brunt of a tax than wealthier citizens. Whether or not that makes soda taxes intrinsically unfair is a different question, however. Low-income soda drinkers are much more likely to be obese and also to be on publicly funded health insurance. Taxes on sweetened beverages are arguably a means of shifting costs, at least in part, onto those whose behavior generates them.

As I regularly admonish my patients when I advise them to cut down on sweets and fast food, the goal of programs aimed at reducing soda intake is not to drain the joy out of people’s lives. What is a birthday party without cake and ice cream, after all? Even Berkeley’s relatively painful one-cent-per-ounce tax shouldn’t make occasional indulgences out of reach. (It would add about two dollars to the price of three 2-liter bottles, for example.) Only with habitual consumption would a tax become cumulatively onerous, which is the exact same habitual factor that contributes to developing obesity. And at any point those being taxed can mitigate or obviate that burden, entirely at their own discretion.

No serious person can hold up a soda tax as the sole solution to the ongoing problem of American obesity. But Snowdon’s arguments are insufficient to dismiss it outright. Properly designed and implemented, soda taxes may play a role in preventing obesity and paying for the costs when prevention fails. They remain a worthwhile policy for consideration.

Also from this issue

Lead Essay

  • Christopher Snowdon reviews the efficacy and fairness of sin taxes aimed at preventing obesity. He finds that at low levels of taxation, consumers don’t change their behavior appreciably, and when they do abandon the taxed foods, it will often be in favor of other high-calorie choices. Very high levels of taxation may be needed to bring about significant public health benefits, but here the evidence is sparse, because few jurisdictions have tried taxation at these levels. Moreover, all such sin taxes are regressive; they hurt the poor disproportionately and become justly politically unpopular. Snowdon concludes that sin taxes aimed at obesity are an ineffective public policy tool, even on their proponents’ own terms.

Response Essays

  • Baylen Linnekin largely agrees with Christopher Snowdon on the question of food and soda taxes: They appear to be ineffective. But he takes the argument further in two ways. First, even while taxes show little promise in shrinking waistlines, several government programs, including farm subsidies and sugar protection policies, seem to aim in the opposite direction. If anything, they make Americans fatter. We should abolish these policies immediately. Second, he suggests that taxes on sugar are antithetical to longstanding American traditions, which in the Revolutionary era included outright revolt against the British Sugar Act.

  • Russell Saunders argues that obesity is a complex problem. While sin taxes might not work all alone, they can be a part of the solution. While one can become obese owing to calories from any source, some sources make obesity a great deal more likely. Sodas are just such a source. Taxing them has been shown to cause substitution among teenagers - not in favor of still more empty calories, but in favor of while milk and other more nutritionally beneficial choices.

  • Jennifer Harris argues that advertising has created a dangerous food environment, one that is too strong for most parents to overcome. So while we might all agree that parents should be responsible for their children’s health, this simply isn’t possible anymore: Corporate profits come first for corporations, and they are winning the battle over what goes into our kids’ bodies. The result is an epidemic of childhood obesity. Further, the evidence shows that obese children tend to grow into obese adults, with all the associated health problems. Local governments know the costs of obesity, and they have responded with exercise and healthy eating initiatives, including soda taxes, but also exercise programs and education about the benefits of healthy eating.