Manhattan Institute for Policy Research.
Subscribe   Subscribe   MI on Facebook Find us on Twitter Find us on Instagram      


The Tax That's Good For You

April 27, 2009

By David Gratzer

Educational campaigns. Bans on trans-fats. Modest taxes on junk foods. Fast food free zones. Calorie listings at restaurants. Here in the United States, local and state governments are experimenting with these measures. They aren’t alone: with rising obesity rates — and the heavy costs associated with obesity-related illnesses — governments across the western world wrestle with this problem.

To date, none of these initiatives has achieved much.

Writing in the New England Journal of Medicine, Dr. Thomas Frieden, Health Commissioner of New York City, and Prof. Kelly Brownell, Director of the Yale’s Rudd Center for Food Policy and Obesity, feel not enough is being done. They take aim at soft drinks.

“Sugar-sweetened beverages (soda sweetened with sugar, corn syrup, or other caloric sweeteners and other carbonated and uncarbonated drinks, such as sports and energy drinks) may be the single largest driver of the obesity epidemic.”

And they prescribe stronger medicine. Taking a page from the anti-smoking campaigns of old — is Coke the new Camel? -- they advocate a massive new soda tax of 3 cents an ounce, or about $3 for a case. If that sounds stiff, it is. They hope to discourage Americans from drinking sugared soft drinks.

Governor Paterson briefly flirted with the idea of a soda tax back in December (as did legislators in Maine), but it fizzled out. But was Gov. Paterson merely ahead of his time? Five years ago, no one had heard of trans-fats; today, cities across North America have banned the lipid from foods.

As William Saleton observes at Slate, Frieden and Brownell don’t simply make a public-health case, they outline a political strategy — and one bold enough to work

Step 1 is to convince us that soda isn’t really food. If you think this can’t be done, wake up: Frieden has already done it to trans fats. In the NEJM article, he and Brownell spurn the notion that soft drinks are sacred because “people must eat to survive.” They tartly observe that “sugared beverages are not necessary for survival.”

Step 2 is to associate soda with products we already stigmatize and regulate as harmful. On this point, the authors quote Adam Smith: “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.”

Step 3 is to persuade you that one person's soda consumption harms others, thereby transcending personal liberty. The authors write: “The contribution of unhealthful diets to health care costs is already high and is increasing—an estimated $79 billion is spent annually for overweight and obesity alone—and approximately half of these costs are paid by Medicare and Medicaid, at taxpayers’ expense. Diet-related diseases also cost society in terms of decreased work productivity, increased absenteeism, poorer school performance, and reduced fitness on the part of military recruits, among other negative effects.” …

Step 4 is to target kids, because our urge to protect them makes us more amenable to paternalism. “Sugared beverages are marketed extensively to children and adolescents” and “now account for 10 to 15% of the calories consumed by children and adolescents,” Frieden and Brownell observe. In fact, soda makers “exploit the cognitive vulnerabilities of young children, who often cannot distinguish a television program from an advertisement.” New York Mayor Michael Bloomberg echoes this plea: “We have to do something to help our children.”

Step 5 is to tempt policymakers with cash flow. “A third consideration is revenue generation,” the authors note. “A penny-per-ounce excise tax would raise an estimated $1.2 billion in New York State alone.”

Step 6 is to persuade voters that the tax is for their health, not for cash flow. Frieden and Brownell note the political importance of this message: “[A] poll of New York residents found that 52% supported a ‘soda tax,’ but the number rose to 72% when respondents were told that the revenue would be used for obesity prevention.”

These are all clever arguments. With state treasuries hungry for cash, Step 5 may really hit the sweet spot for state legislators (pardon the pun).

But is Pepsi really the problem? Is the fundamental issue soda or lifestyle? Advocates seem to think the former. Back in December, New York Times’ columnist Nicholas Kristof declared the soda tax a “breakthrough” and Governor Paterson’s proposal “a landmark effort.” He suggested it was a modern version of the cigarette tax, which he credited with saving so many lives.

That’s one view. And, yes, if America has a pop problem, taxing sweet bubbly makes sense.

But if the issue is that we simply gorge on too many calories, in part because of a growing cultural acceptance of obesity, a soda tax will just result in a shift to other high-calorie foods (that is, candy, not carrots). That will not, as Mr. Kristof predicts, make us “healthier;” it will be the public-policy equivalent of the placebo.

Original Source:



America's Legal Order Begins to Fray
Heather Mac Donald, 09-14-15

Ray Kelly, Gotham's Guardian
Stephen Eide, 09-14-15

Time to Trade in the 'Cadillac Tax' on Health Insurance
Paul Howard, 09-14-15

Hillary Charts the Wrong Path on Wage Inequality
Scott Winship, 09-11-15

Women Would Be Helped the Most By an End to the 'Marriage Penalty'
Diana Furchtgott-Roth, 09-11-15

A Smarter Way to Raise Paychecks
Oren Cass, 09-10-15

Gambling with New York's Pension Funds
E. J. McMahon, 09-10-15

Vets Who Still Serve: After Disasters, Team Rubicon Picks Up the Pieces
Howard Husock, 09-10-15


The Manhattan Institute, a 501(c)(3), is a think tank whose mission is to develop and disseminate new ideas
that foster greater economic choice and individual responsibility.

Copyright © 2015 Manhattan Institute for Policy Research, Inc. All rights reserved.

52 Vanderbilt Avenue, New York, N.Y. 10017
phone (212) 599-7000 / fax (212) 599-3494