Remember the crazy days back before Michael Bloomberg devoted all of his time to gun grabbing when he just wanted to ban soda? Good times, my friends, but they may not be over. While banning large sodas outright sort of fell apart in the courts under scrutiny, opponents haven’t given up the fight entirely and they think that the next election cycle is just the time to approach the problem from a different angle. If you can’t make soda illegal, just tax it until nobody can afford to drink it! Or at least that seems to be the favored approach in the Big Apple. Example one of this phenomenon comes to us from Tom Farley at the New York Daily News.
Why are people suddenly talking (again) about a tax on soda? Didn’t we reject that idea after my old boss, Mayor Bloomberg, was rebuffed a few years ago in his efforts to reduce consumption of sugary drinks?
The truth is, we never really gave the idea the fair hearing it deserved, and it’s long past time we finally fixed that error…
It’s time to reconsider the idea here. Rates of obesity and diabetes are still rising in New York, and Dr. Daines’ argument still holds. A one-cent-per-ounce tax would add 20 cents to a 20-ounce bottle, which is just enough to nudge people to switch to a beverage without sugar (or better yet, drink tap water for free).
That wouldn’t end the obesity epidemic, but would slow it down, preventing many thousands of getting type 2 diabetes. The tax would also bring in roughly a billion dollars a year to the state, which could go into programs to prevent obesity or other pressing government needs, from schools to subway repairs.
One penny per ounce isn’t enough for the editorial board at the New York Times. They’re singing the praises of a new law in Mexico where they jacked up the price to the point where poor people could no longer afford it.
In 2013, the Mexican government imposed a tax on sugar-sweetened drinks that amounted to a 10 percent increase in the price of the beverages, a substantial jump but only half the increase many experts think is desirable. The tax was imposed on distributors, rather than as a sales tax, so that any price increase to cover the tax would be visible to consumers when they were deciding on the purchase, before they got to the cash register.
The sellers in Mexico chose not to absorb the cost of the tax, but to pass it on in the form of higher prices, which successfully drove down consumption. Preliminary results from a study by University of North Carolina researchers and Mexican public health authorities found that in 2014 there was an average 6 percent decrease in soda sales in Mexico that intensified over the year. Sales were down 12 percent in December from the preceding December and down as much as 17 percent for the lowest-income Mexicans.
Congratulations. You’ve managed to save the poorest Mexican people from themselves. The article goes on to note that [w]hat isn’t known yet is whether the drop in soda consumption will improve the health of consumers or whether they substituted other caloric foods and beverages. Of course it’s too soon to tell, but if people tend to want snacks and sweet things to drink they’ll probably find them. Don’t be terribly shocked if nothing changes very much on the health front.
A stringent tax such as the one being proposed is portrayed as a public health issue, but that’s a pretty tough sell and actually flies in the face of normal governmental procedure. Much the same as with cigarettes, if you believe something is actually toxic and harmful to people, why are you allowing it to be sold at all? Some advocates are flat out calling soda poison. If that’s the case, you are not only knowingly allowing poison to be sold to the public under the guise of being a beverage, but you’re collecting taxes on it to fill the state’s coffers. But it’s the “filling the coffers” part that’s really at the heart of it, isn’t it? You can’t modify people’s behavior through the tax code even if you truly wanted to. But you can get people to swallow a tax hike (pun intended) if you disguise it as a public health initiative.
A ban was found to violate the law, but taxes are all the rage. Let’s make sure that they don’t get away with this one.