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LA Times: What's the right way to tax sugary drinks?

"If you believe obesity is a serious health risk in the United States and sugary drinks are a major contributor to the problem -- and that's surely the prevailing nutritionists' view -- then a sugared beverage tax has to be on your radar screen.

Now two university economists have found levying this sort of tax is the wrong approach. It's much more efficient and effective, argue Matthew Harding of Stanford and Michael Lovenheim of Cornell, to tax the sugar, not the drink. The main reason is that a sugar tax tougher to evade."

http://www.latimes.com/business/hiltz...

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  1. Why not just tax non-nutritive beverages? I'm OK with taxing them, but I think diet drinks should be taxed as well.

    4 Replies
    1. re: EricMM

      Sugary soda and diet soda are subject to sales tax in California since they are not considered food which is exempt from sales tax.

      There are parts of the state, mostly in agricultural areas, that do not have safe drinking water. For people in these areas, bottled soda is the beverage of choice since it can cost less than bottled water. This is the argument against soda tax that I heard from some food security officials in Kern County (Bakersfield).

      1. re: Melanie Wong

        " bottled soda is the beverage of choice since it can be cost less than bottled water"

        Houston, we have a problem...

        1. re: pedalfaster

          And sometimes beer costs less than bottled soda . . . so where does that leave us?

          So, I do see their point. Until there's an affordable alternative, e.g., tap water, a beverage tax would be quite a burden for people who live in those areas. I would like to see the legislative agenda tackle fresh clean drinking water for all Californians.

      2. re: EricMM

        Yeah why not? We already tax alcohol.

      3. I don't support sin taxes of any type. Period.

        18 Replies
        1. re: rasputina

          I believe one can legislate morality.

            1. re: smoledman

              I don't believe that it is an issue of morality. Obesity is an epidemic that we cannot afford to ignore. A tax on sugary drinks might be one way we can get people to think about what they drink so maybe they make a more healthy choice.

              Is it possible that we can remake pop/soda to make it more healthy?

              1. re: Kelli2006

                We already have diet soda. I don't see how you can make it any "healthier."

                1. re: Roland Parker

                  Diet soda might have fewer calories than the regular product but it isn't healthier for you.

                  I don't like the idea of giving the government more power over our lives and would rather see more healthy choices and more unbiased education about our diet.

                  An economic situation that allows a person to afford a healthy diet might be too much to ask for in the current hyper-partisan political climate.

                2. re: Kelli2006

                  Why don't we tax people who don't exercise? Same principle, deterring people from making a perceived bad choice

                  1. re: angelo04

                    That would be almost impossible to enforce. How do you prove that you exercised for so many hours a week?

                    Encouraging exercise is a very good idea but taxing people people for not doing it is almost impossible to enforce.

                    1. re: Kelli2006

                      You may want to consider this.

                      The average British today consumes fewer calories than the average British did in the 1970s.

                      But the average British today is heavier than his 1970s equivalent.

                      Why? Because the average British today is much more sedentary than the 1970s equivalent. More people own cars and drive instead of walking.

                      You could impose a supertax on sugary drinks, which would probably reduce the consumption of sugary drinks. But will it have any impact on the overall consumption levels for all food products? Will the calorie intakes actually go down due to a higher tax on sugary drinks or sugary products?

                      It's fashionable to lay the blame for obesity on high fructose corn syrup, but we're ignoring that people simply consume far more food than they did in the past. Food portions are bigger, both at home and in restaurants. People consume lots of unsweetened junk food - pizza comes to mind and pizza is very high in calories. Pasta is another great example. People eat a lot more pasta today than 30 years ago.

                      There's two ways to reduce food consumption: education and a broad tax on all foodstuff. With food costing much more, people will naturally reduce their consumption of food.

                        1. re: linguafood

                          I never claimed too much sugar wasn't bad for you.

                          But obesity is a consequence of a much larger problem. Sugar is just one small component of it. Focusing solely on sugar is too easy and conveniently ignores things like too much carbohydrates, too much salt, too much food in general and sedentary lifestyles.

                          People who are very physically active can still consume large quantities of sugar and still not be overweight or unhealthy.

              2. re: rasputina

                So...you believe cigarettes should still cost $2 a pack, then?

                1. re: linguafood

                  I think they should cost whatever the market will bear. That should be decided by the cigarette companies and smokers. Not state and federal governments.

                  1. re: rasputina

                    Right, because nobody ends up having to pay for the health issues that smoking tobacco causes. It'll all just magically adjust itself. Free markets!

                    Gotcha.

                    1. re: linguafood

                      Right because the Gov is giving the sin taxes to hospitals? They have such a spotless track record of following through on their promised ear marks for tax monies. Not.

                      1. re: rasputina

                        The "sin taxes" I currently pay were almost doubled last year, to pay for a new professional football stadium cum palace, when the expected funding to be provided by electronic pull tabs failed to materialize. Big government, big corporations, two sides of the same coin. I have become cynical beyond redemption.

                        1. re: Pwmfan

                          I know I sound dense BUT what are electronic pull tabs? What am I missing here? Help:)

                          1. re: MamasCooking

                            A form of gambling, much like lottery scratch off games, but conducted on computer terminals installed in MN bars, in an failed effort to fund a new NFL stadium. When this scheme did not raise the necessary funds the state decided to use a portion of the cigarette tax money instead. Money which was presumed by many to go toward anti tobacco causes or at least into the general fund.

                            1. re: Pwmfan

                              Oh ok. Damn those corrupt politicos do what they want with money meant for good causes.

              3. That's a great idea (if it includes HFCS as well, which I presume). Given how many food products have added sugar that is completely unnecessary, it might prevent corporations from adding them.

                1. While we are at it, lets tax orange juice, thats a sugary drink. We should tax pure white sugar and raw sugar too so that the coffee, tea drinkers, and bakers of sugary bakery snacks pay their fair share.

                  Where does it end?

                  15 Replies
                  1. re: angelo04

                    That's why other people are suggesting to tax sugar instead of just sugary drinks. It says so in the second paragraph of the OP, btw.

                    1. re: linguafood

                      Why should people who are fit and healthy and certainly not obese have to pay a "sugar tax" because other people are obese? I bake. I enjoy a bit of sugar in my coffee. I feed my children cakes and cookies. I know my boys will have a soda every now and then. And guess what? We're all on the very low end of our BMI, physically active through multiple sports and according to our doctors, in excellent health. Should we be penalized?

                      Smoking is harmful for everyone who smokes. Sugar is not harmful to everyone who consumes sugar. There are plenty of people who consume very little sugar but are still obese through a high carbohydrate, meat and dairy oriented diet (and no exercise). Taxing only sugar is a red herring.

                      1. re: Roland Parker

                        I agree - this is just another money grab - and NONE of that money that is confiscated is going to pay for the health care of anyone.

                        1. re: Roland Parker

                          We have surging health care costs that we all pay for and this sugar consumption leads to problems that increase those costs.

                          Some people that are disadvantaged and work multiple jobs don't have time to be physically active, why should they be penalized a second time for poor health.

                          Sugar consumption is out of control and since health care is clearly a basic human right in this country we need to start at the most basic level in making folks healthier

                          1. re: cstumiller

                            What a crock of you know what.

                            Benn poor too so don't tell my I do t understand.

                            2 words. Personal Responsibility.

                            It seems more and more people lack it and think that Father goverment knows best. Wow....SMH

                            1. re: angelo04

                              I agree it does have to do with personal responsibility but the poor also tend to be less educated in these areas. A tax would take that burden away just as giving them organic foods which are generally not even available in those neighborhoods.

                              The government does have a role....look what the free market does, they put Mcdonalds and popeyes in poor neighborhoods and rarely Chipolte or more healthy qsr options

                              1. re: cstumiller

                                Chipotle is not healthier than McDonalds...

                                I took a few "urban studies" classes back in the day and this topic came up. A manager of a supermarket chain was asked by well-meaning students why poorer areas have fewer healthy grocery options, especially produce. His response was to the point: they won't buy it. Supermarkets in poorer neighborhoods do not see enough turnover in produce to justify stocking them on a regular basis. My sister taught at an urban middle school for two years and she said students repeatedly rejected the fresh fruits she brought to the classroom in favor of cheap junk food bought at local corner markets. It's an complex question and the answers involve a lot more than just why are there junk food restaurants in poor areas.

                                1. re: Roland Parker

                                  So any step in the right direction should be appreciated. It IS a complex question that requires numerous approaches.

                                  Taxing sugar is one.

                                  1. re: Roland Parker

                                    I reject the "they are too stupid argument' you are making. The supermarket chain should be forced to locate in more poor areas (as a condition for stores in other areas) and they should be forced to price the healthier offerings below cost which could be recouped by a health surcharge on groceries in the markets in the wealthy areas.

                                    Again, we can't allow this to be a "personal choice" issue...that is like saying those without health insurance were making a personal choice...It is larger than that and when these "personal choices" effect us the government needs to step in.

                                    1. re: cstumiller

                                      Well, you're suggesting a very radical intervention into the marketplace that is generally not accepted in the United States (or anywhere in the world from what I've observed).

                                      Supermarkets, even in "wealthy" areas have a very small profit margin as it's a hyper competitive industry. They are particularly sensitive to any type of taxes. The only way your offered strategy *may* work is if the government goes into the business of subsidizing supermarkets. In a way it sounds like a decent idea - subsidizing supermarkets for poorer areas to improve healthy options, but the counter argument is that it's no guarantee residents of poorer areas will elect to eat more healthily (I see just as many obese people in more affluent areas, including exurbia and rural areas that have more grocery retail options than inner city neighborhoods). And the other argument against your idea is that shoppers are price sensitive, particularly when it comes to food. If shoppers know that supermarket A is more expensive due to higher taxes while supermarket B is receiving subsidies for lower prices despite offering a similar range of food, shoppers will descend on supermarket B, reducing the sales at supermarket A and thus any tax revenues from that market which is ostensibly meant to subsidize supermarket B.

                              2. re: cstumiller

                                I am fully in support of national health care but I wouldn't call it a basic human right. It's a privilege granted to society by its people and government. There's a difference.

                                So many health problems, especially obesity, is caused through one's personal choices. People *chose* to consume too much. People *chose* to drink too much sugary drinks. People *chose* not to exercise.

                                I *chose* not to eat too much sugar and to achieve a balanced veggie heavy diet while being physically active. While I agree it's good to want to make people healthier as a whole, I am not in favor of instituting widespread taxes or penalties that penalizes people who made the "healthier" choices.

                                1. re: Roland Parker

                                  Choosing not to eat too much sugar is also a privilege of better educated people.

                                  And given how many fucking products in the supermarket aisles (I'm not even talking about heavily processed foods -- it's in *everything* these days) have added sugar, I say tax the shit out of sugar for the corporations who think they need to use it in order to hook their consumers on the crap they sell.

                                  But that probably makes me a socialist :-D

                                  1. re: linguafood

                                    No, not a privilege. A choice by people, regardless of income levels, not to consume too much sugar.

                                    If you really want to tax "bad" food then we must also tax the "shit" out of meat products, particularly cheap meat pumped full of hormones. We must also tax the "shit" out of fast food - all of it from McDonalds down to the local pizza joint/Greek diner. We must also tax the "shit" out of whole milk and heavy cream. We must also tax the "shit" out of food high in carbohydrates such as pasta. We must also tax the "shit" out of salt. And it shouldn't stop there. Tax the "shit" out of most upscale restaurants because their food are laded with butter and cream and sugar too.

                                    The irony is, of course, is that the greatest uproar will come from the heavier people due to the additional costs, and of course, due to that it's their preferred dietary habits. Meanwhile wholesome, healthy, educated richer people can pat themselves on the back and say what a wonderful thing we're doing, especially as it'll cost them the least.

                                    1. re: Roland Parker

                                      Whole milk and heavy cream are perfectly healthy foods, whereas sugar or HFCS have zero worth to the human body. I agree that crappy meat and FF is too cheap for the health costs both cause.

                                      Besides that, I don't buy the slippery slope argument.

                                      What's with the quotes around the word shit, btw? To make sure people don't take it literal?

                                      1. re: linguafood

                                        Whole milk and heavy cream are high in saturated fat and calories. They can be just as unhealthy as sugar, depending on your intake.

                        2. At least there's no tax on bottled water in CA. Although recycling plastics is a whole other issue.

                          1. Taxpayers give money to sugar farmers and corn farmers to keep this stuff cheap, and then we tax consumers because they drink too much soda. This is madness.

                            1 Reply
                            1. re: ChrisOfStumptown

                              I don't live in the states, but that seems insane to me! Give people little choice and then tax them for, what could be seen as, the monopoly. Wow.

                            2. Challenging the secretive, privately owned and fabulously wealthy owners of the United States Sugar Corporation, which is becoming richer still by selling part of the Everglades drainage area back to the United States, but with long term rights, is all but invincible. A sugar tax is as likely to succeed as the trade embargo with Cuba has been for 53 years.

                              1. I would support this as long as we provide sugar credits to those in poor neighborhoods who tend to consume an inordinate amount of these products. Allow them to purchase $500 each year tax free? Or perhaps rebate the tax for some? Otherwise this tax smells very regressive to me.

                                8 Replies
                                1. re: cstumiller

                                  Such a program would be brutally expensive to administer, if even possible, plus the customary street protests.

                                  1. re: cstumiller

                                    Sugar credits for the poor? I am sure our goverment could monitor and manage this efficently. They do a stellar job with everything else they regulate. SMH.

                                    1. re: cstumiller

                                      Ah, yes. MORE redistribution of our tax money. It never ends.

                                      And only the "rich" should be punished for their sugar consumption?

                                      Give me a break.

                                      1. re: flourgirl

                                        The poor have no choice in the matter...we don't pay them enough to be able to make healthy diet choices (which lead to poor health which btw we don;t pay them enough to get proper coverage, who can live on a "bronze plan").

                                        Heck even the EBT program for food is poorly done, we should give each family a basket of healthy food including organic so they can feed the family in a healthy manner.

                                        Do you think the poor really have healthy organic choices they deserve?

                                        1. re: cstumiller

                                          It's not always a question of choice.

                                          It's usually a question of information and preferences.

                                          Your "poor" may not know what to do with a basket of free healthy organic food.

                                          The dietary habits of poorer Americans is not something that can be easily justified or explained away or "corrected" through taxes.

                                      2. re: cstumiller

                                        It's been argued on this thread that poor Americans need help because they're too obese, presumably from drinking too many of the sugary stuff.

                                        A $500 sugar tax credit for poor Americans would pretty much destroy the purpose of the sugar tax in the first place.

                                        1. re: Roland Parker

                                          Do you expect the poor to not consume Sugar? If it is determined it should be taxed they would need rebates and credits. Heck we keep taxing gas and never think what it does to people on limited means..again that and all government taxes (not income) should provide for rebates to the poor.

                                          We need to think along the lines of what is best for all. Organic food is healthier and more expensive perhaps a tax on this with rebates to the less well off also. We need to think out of the box, and solve problems that is what the government is for.

                                          1. re: cstumiller

                                            No, the government is NOT there to "solve problems." That is exactly the kind of thinking that is destroying this country. People have been indoctrinated into believing that nonsense when it's absolutely NOT part of the values this country was founded on and it's NOT part of our Constitution.

                                      3. I'm tired of social manipulation by the government. This is just another money grab disguised as social consciousness. It's also way too big brother, this is supposed to be a free country - not a country where the government punishes "poor" decision making with higher taxes.

                                        If the government wasn't involved in our health care to the extent that it is, than the cost of health care wouldn't be the government's concern. And the high cost of health care is largely contributable to government interference in the market in the first place - including tons of unfunded mandates that politicians love to foist onto the backs of insurance companies.

                                        11 Replies
                                        1. re: flourgirl

                                          A sugar tax is "social manipulation"? I guess you disagree with Michelle Obama in trying to help our youngsters be more healthy in our school lunch program?

                                          Since government needs to be involved in these food choices (which everyone agrees upon), they might as well do it correctly.

                                          1. re: cstumiller

                                            NO! Everyone most certainly does NOT agree that the government needs to be involved in our food choices. There are MILLIONS of people in this country who don't believe our government should be involved in our food choices other than assuring that our food is free of contaminants. And they don't even do such a good job of that.

                                            People need to be adults and make their OWN food choices. It's pathetic that you think that people need the government to tell them what to do. No wonder this country is going down the crapper.

                                            1. re: cstumiller

                                              And BTW, I guess you haven't been paying very close attention because Michele's "school lunch program" has been a gigantic failure.

                                              http://m.washingtontimes.com/news/201...

                                              http://theblacksphere.net/2014/01/mic...

                                              1. re: cstumiller

                                                I thought political issues were off limits on Chowhound. I don't look to Michelle Obama for advice on anything.

                                              2. re: flourgirl

                                                As a health care practitioner (recently retired) I my own opinions. I believe that comprehensive nutritional education should be included in all school curriculum throughout all of the grades in public schools. Many mothers/parents/families just do not have access to adequate nutritional information. I agree that taxing the *garbage* and essentially making it too expensive to purchase on a regular basis is intrusive because the government is behind it but it is also not a useless strategy. Michele Obama risked her popularity as the First Lady by becoming a strong advocate for feeding our school age kids nutritional foods. Of course the individuals who rake in big bucks for selling sugary drinks are going to oppose the tax because it will stop many people from buying the stuff. We can all live without soda. Do I really need to go on and write about obesity and the related health problems that basically destroys the health status of people? Processed foods...HFCS...soda....lack of movement= BIG Trouble!

                                                1. re: MamasCooking

                                                  I agree with you but education is not enough from our government...we need protection which is a justifiable use of government power.

                                                  We know we have a serious global warming problem...we need protection not waiting years for our public schools to better educate kids. BTW, nutrition education should be also required in private schools.

                                                  As for Mrs. Obama, she walks the walk, exercises, eats healthy and is a model for good clean living. Kudos, IMO our most impressive first lady.

                                                  1. re: MamasCooking

                                                    I believe we can legislate physical activity too. Hell, I'd install a telescreen in every home and force everyone to do morning knee-bends supervised by a government health instructor on pain of death.

                                                    1. re: MamasCooking

                                                      We are already spending too much on education and now you want to spend more.

                                                      When did it become OK for so many people to be such lousy parents? What exactly ARE parents expected to do for their kids these days? Because it seems like everyone else, including our schools, are now expected to pay for and raise other people's kids these days.

                                                      Maybe people who "don't have access to adequate nutritional information" should try using their local libraries. They're free.

                                                        1. re: linguafood

                                                          Yes, we spend too much on education. I live in NJ. We spend over $25,000 per year per student on the kids in our inner cities (over $18,000 per child in the rest of the districts) with almost nothing to show for it. Yes, that is FAR too much money, and it's money being thrown into a big dark hole.

                                                          My property taxes are $9,000 per yr on an 1800 sq. ft residence and over 85% of that money goes to our schools.

                                                          So yes, excuse me if I believe we are spending too much on our schools.

                                                          1. re: flourgirl

                                                            Folks, this is not a political site, nor one about education. Please let this tangent go.

                                                  2. Sugar overall isn't the problem. A modest amount of sugar in the diet is not an issue.

                                                    The issue is that sugary drinks encourage an unhealthy amount of sugar consumption in one shot. That's why it's better to focus on reducing the amount of sugary drinks consumed, rather than having a blanket sugar tax.

                                                    If you broadly increase the price of sugar overall, then you're not directing any specific change in dietary habits, which doesn't make any sense.

                                                    4 Replies
                                                    1. re: calumin

                                                      Agreed. I don't have a problem targeting a very specific product like sugary drinks as it's been demonstrated too much soda is too unhealthy. I'd like to see what happens when a can of coke goes from .75 cents to $5.

                                                      But a blanket sugar tax is highly misleading. A small incremental increase in the price of sugar across the board is highly unlikely to have a noticeable impact on dietary habits and will most likely end up hurting bakeries the most, particularly smaller, locally owned bakeries.

                                                      1. re: Roland Parker

                                                        It's still not the government's place to be social engineering in that way. No one is forcing soda down anyone's throat. Whatever happened to personal responsibility in this country?

                                                        1. re: flourgirl

                                                          The government did a good job regulating cigarette consumption in this country over the past 20 years - I have no problem with that.

                                                      2. I would like to take an opposite approach to this problem. Instead of mandating a tax on sugary drinks I would propose all companies selling "sugary" drinks must offer a healthy alternative, including simply bottled water.

                                                        The key would be that the healthy alternative needs to be priced at a 25%-ish lower price to its sugary brethren.

                                                        Make the healthier alternative the most cost efficient and see if that makes it more appealing poorer families.

                                                        If it works you offer tax incentives to the companies for coming out with the most low cost healthy alternatives.

                                                        6 Replies
                                                        1. re: jrvedivici

                                                          I agree with you that the important thing is to present to consumers easy substitutes. That's why I don't like a blanket sugar tax -- consumers will just see this as inflation, rather than a choice to go with the higher-taxed product vs. a healthier alternative.

                                                          The problem I see with your approach is that it's not sufficient for a company to simply produce an alternative product for it to be made available to consumers with the same level of distribution. What's important is what consumers see at the store, not just what companies claim to produce.

                                                          1. re: calumin

                                                            Yes sorry retailers HAVE to offer equal shelf space for both products. Without a doubt.

                                                            1. re: jrvedivici

                                                              Supermarket shelves are already groaning with bottled water.... frankly most bottled water is unnecessary given that tap water is perfectly fine in the US. I've never bought into the bottled water mania given that it's a sheer waste of resources and only serves to fill the landfills with plastic bottles.

                                                              The problem is what drinks are commercially available, besides water and flavored water, that isn't loaded with sugar? Fruit juices and lemonades are loaded with sugar too. Outside of water, unsweetened coffee and tea and milk, what do people drink that isn't sweet?

                                                              1. re: Roland Parker

                                                                I would be willing to bet you dollars to donuts that if my scenario were to be enacted, give the soda companies 1 year to implement the Healthy vs. Sugary Beverage Consumption act. (look I've named the legislation already) you would be amazed with how many new healthy innovations would hit the market. It's all a matter of motivation, you dictate the policy and offer incentives for the implementation and let the free market work it's magic.

                                                                That's by theory at least. I certainly prefer that to any "tax" situation.

                                                                1. re: jrvedivici

                                                                  "Healthy" mass produced sugar free drinks that isn't plain water. Sounds like a lot of preservatives and additives to jack up the flavor quotient.

                                                          2. A Hitler Youth manual proclaimed, “Nutrition is not a private matter!

                                                            1 Reply
                                                            1. re: Uncle Bob

                                                              Agreed, the personal is political.

                                                            2. Where does it end?

                                                              This isn't a government issue. Stay out of my grocery basket!

                                                              1. You have to broadly tax all sugars then, including sugar, corn syrup etc. Also make sure to also tax sugar alternatives like nutrisweet etc.

                                                                  1. Actually the first thing to do is stop the corn subsidy. No more super cheap high fructose corn syrup.

                                                                    2 Replies
                                                                    1. re: smoledman

                                                                      That makes sense. Not a sugar tax. It's counterproductive to subsidize sugar and corn producers and yet levy a tax on the consumers at the same time.

                                                                      1. I am going to 7-11 today and getting a big gulp sized coke. While drinking it I will toast this thread. Cheers!

                                                                        2 Replies
                                                                          1. re: angelo04

                                                                            Better yet get a giant Slurpee. As much as I rarely eat sweets..... that is some sugar I am willing to pay tax on! Blue Slurpees, popsicles and missle pops in our scorching California summers.

                                                                          2. The right answer is: none.

                                                                            You can't legislate intelligence or morality. People are free to make stupid choices in a free society.

                                                                            People can believe what they want, but when they use the word "believe" you know there is no actual evidence on their side, and in fact all real factual evidence is against them.

                                                                            1. Melanie,

                                                                              This is nothing against you. You are a great poster. However, assumption here is that the government has the right--nay, the duty--to protect us all from harm from things which, used in moderation, are not harmful at all.

                                                                              The economic destruction caused by Prohibition in the 1920s and early 1930s is a great example. So, too, sugar.

                                                                              What gives the government the right to discourage me from eating what I want to eat?