One tool that "obesity epidemic" alarmists have suggested for addressing how to trim Americans' waistlines has been to slap taxes on sugar-laden soft drinks.
The media have dutifully reported the notion from time to time when they're raised in different localities.
Now a new study by economist Eric Finkelstein finds that such a tax would have relatively little impact in terms of helping Americans slim down.
Time.com's Alice Park has the story at the magazine's Healthland blog, but I'm not holding my breath for major media outlets to report the findings (emphasis mine):
In an effort to combat the growing obesity epidemic, legislators in some states have recently contemplated charging a sugar tax on sweetened beverages such as sodas, sports drinks and fruit juices. Some estimates suggest that a 20% tax on these drinks would lower consumption by about 16%. (More on Time.com: Guiltless Gluttony: Why We Eat More From 'Small' Packages)
But to date, it has not been clear whether increasing the price of these drinks will actually curb the expanding girth of the American population. So Eric Finkelstein, an economist at Duke-National University of Singapore, decided to model what effect a 20% and 40% tax on these beverages would have on weight.
He was surprised to find that the impact was modest at best. Opponents of sugar taxes have raised concerns that they would be regressive, unfairly targeting those at lower incomes. But according to Finkelstein's model, which included data from the Nielsen Homescan panel, a survey of purchases made by a representative sample of American households, lower-income families did not appear to be affected by the tax, at least not judging by weight loss: they showed among the smallest changes in weight over a one-year period.
“I didn't expect that finding for the lowest income group,” he says. “I thought they would be the most responsive to a tax.”
What may be happening instead, he says, is that low-income individuals simply switch to other untaxed sweetened alternatives, or find alternate ways to offset the added cost of the tax, by buying in bulk or choosing generic brands. (More on Time.com: A Man Dies After Overdosing on Caffeine)
And that points to an important, perhaps overlooked factor when it comes to applying a tax to curb consumption. While Finkelstein's analysis did find an overall loss in weight, albeit small, associated with both a 20% and 40% tax on sodas, weight loss was even greater when the tax was applied to all sweetened beverages, including the alternatives that people might buy instead of soda.
Park made clear that Finkelstein himself is a believer in levying sin taxes on unhealthy food options:
Even with the modest weight loss he found in his models, Finkelstein believes taxes on high-calorie foods such as sweetened beverages do make sense as a way to combat obesity. But, he says, such tariffs need to be applied in the right way in order to lead to health benefits. “As an economist, part of the reason that I think these taxes are appropriate is because the government provides a large subsidy to farmers of corn and soy so the prices of these goods that contain high fructose corn syrup remain below market prices. So to me, it makes sense that the government should consider taxing products that contain these ingredients,” he says. “But if you target just one of them, then you'll have a very modest effect on consumption, so it seems hard to justify taxes on sweetened beverages and not on candy or sugared cereal as well.”
Of course, getting rid of government corn subsidies would also raise the price of soda for the end consumer, but doing that alone would still leave government tax collectors out of the fun, wouldn't it?
