Sin Taxes Work, But Should We Use Them?

Shocker: when soda prices go up, consumption goes down

Diet Coke is my Frobscottle

Berkeley, CA, managed to overcome the resistance of lobbyists and Libertarians alike and instituted one of the nation’s first taxes on sugary drinks. The preliminary results are striking: soda purchases are significantly down, though up a bit in neighboring areas, and water consumption is way up, especially among low-income people.

The Health & Fitness Cheat Sheet sums up both the soda tax specifically and sin taxes more generally:

When cities or states put taxes on certain products (cigarettes, alcohol, etc.), it’s in an effort to actually make them more expensive. Because when things are more expensive, fewer people will buy them. It’s an incentive not to buy or use something — the costs go up, and some marginal consumers will choose to alter their behavior in response. In the case of soda taxes, the desired result is to get people to drink less soda. In Berkeley, California, the implementation of a soda tax has worked pretty much perfectly.
According to a new study published in the American Journal of Public Health, Berkeley’s $0.01 per liquid ounce tax on soda and other sugar-sweetened beverages has had a dramatic impact on consumer behavior — a 21% drop in soda consumption overall.

The success was so clear, and public health officials so happy, that other localities are now getting in on the action. Or, well, they’re trying to, but there’s a tidal wave of corporate money in the way.

Drink manufacturers, who until two years ago had a perfect winning streak, are already spending big to try to blunt any further pro-tax momentum. The beverage industry has reserved $9.5 million of TV air time in the San Francisco media market. It’s an early move to ensure tax opponents have air space in a cycle where city voters will consider dozens of other ballot initiatives.
In Oakland, disclosures show, the industry has spent nearly $750,000 on consulting services and advertisements, which is many times more than has ever been spent on a ballot measure there, locals are quick to point out. And it’s only August. … Tax proponents have spent a little more than $23,000 in Oakland, roughly 3 percent of what the industry has spent there.
“It feels like you’re in a hail storm with two-inch hail stones coming at you all the time,” said Larry Tramutola, the political consultant coordinating the pro-tax efforts in the Bay Area. “The soda industry has so much money and there’s just no limit.”

Industry lobbyists are calling the proposed levy on sugary beverages a “grocery tax,” which is savvy, since who wants to vote to increase the price of groceries? It’s not even that much of a stretch, either: soda has become an American staple, for better or for worse.

Mostly for worse, of course. “Liquid candy” is damaging to both our bodies and our teeth, and it’s addictive. Many of us crave it on a daily, or near-daily, basis. “You’re probably already on board with the idea of consuming wet sugar with bubbles in it!” enthuses the host of this Cracked satire video. Or the diet version, dependent on “chemicals so incompatible with human biology, our bodies can’t even metabolize them!”

I acknowledge the truth of all of this, even though you can pry my bottle of Diet Coke out of cold, dead, probably still trembling hand.

I also acknowledge that it’s ridiculous that soda is so cheap; anything this bad for us should probably be more, even prohibitively, expensive. Certainly more expensive than WATER. But on a personal level I’m not happy about soda taxes. It’s selfish of me, I know. I’m generally healthy and this is my one vice, dammit! Do I really have to pay through the nose for it? Well, maybe. Better still: instead of trying to change behavior by levying tiny taxes, city by city, we can reform the ridiculous laws that made, and keep, soda artificially inexpensive. If it cost what it should cost, we who love it could still get it from time to time—not as a staple, but as the treat it was intended to be.