Tax Soda Calories, Economist Says

Monday, June 02, 2014

Despite long political odds, a handful of legislators in New York and across the country want to fight the obesity epidemic by imposing new taxes to make soft drinks less palatable.

In a study released today, economist Chen Zhen, from the RTI International research institute, says lawmakers should consider a different approach. Most proposals have focused on taxing by soda size, but Zhen's analysis of purchasing pattern data in New York suggests a tax based on calorie content would be more effective, because it would make more fattening drinks more expensive.

"A per-calorie tax treats products with a different caloric content differently, basically making lower-calorie drinks more affordable," Zhen said. "Consumers are incentivized to search for a lower calorie drink."

Zhen found consumption fluctuates according to price, so when stores have a sale on Coca Cola and discount it by 10%, people typically buy 10% more Coke — and the opposite happens when the price goes up 10%. Zhen says for consumers who are unwilling to switch to sugar-free beverages, taxing by calorie could at least shift them to less sugary beverages.  

New York State is one of a dozen places nationwide considering a new soda tax. Similar proposals have been defeated twice in the state legislature.


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Comments [3]

Shawn from NJ

Infringe on individual rights? How, exactly, do you think this tax infringes on anything?

When the US government gives money to farmers to make more corn, which turns into high fructose corn syrup that is CHEAP, then the US government is directly financing this healthcare crisis.

Stop the money to subsidize the corn, and this will end. The soda will cost more.

In the 2020s, sugar will go the way of tobacco. Our kids will be shocked that we actually drank that stuff. Artificial sweeteners too. They will just be shocked that the world existed this way, shoveling garbage into the mouths of developing kids and adults.

Jun. 27 2014 10:22 AM
Carl A Hunter

What a waste of time this new tax is.

anyone for civil disobedence? here's a t-shirt.

Jun. 05 2014 11:06 PM
American Beverage Association, ABA Communications

Soda tax proposals have been introduced under the guise of helping health, and have failed to gain traction. Why? For one thing, polls indicate that a majority of consumers oppose such taxes, which infringe on individual rights. In addition, such cookie-cutter regulations won’t help health. Education, not regulation, is capable of changing health behaviors in a meaningful way by focusing more comprehensively on balancing all calories with physical activity. So-called “sin taxes” may add to government coffers, but they certainly won’t benefit consumers.
-American Beverage Association

Jun. 03 2014 09:14 AM

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