Fizzy Math: Tax Soda to Pay for Health Care and Prevention

Why tax soda? Obesity is expensive and soda is cheap.

To be sure, a lot of factors contribute to obesity, including enormous restaurant meals and the couch-potato syndrome. But sugary soft drinks are the only beverage or food that has been shown to increase the risk of obesity. And obesity, in turn, promotes heart disease, diabetes, cancer, and other expensive-to-treat diseases. All told, Americans spend about $90 billion a year in direct medical costs related to obesity, of which half is paid with Medicare and Medicaid taxpayer dollars.

In other words, Americans are already taxed by soda. Out of every paycheck, and on every April 15, we're each paying to treat diseases promoted by the overconsumption of these uniquely worthless beverages.

What was once a rare treat is now the default drink for many, particularly young people. Our 2005 analysis of soda consumption showed that teenage boys who drink soft drinks consume an average of three 12-ounce cans and girls an average of two 12-ounce cans. One in 10 boys who drinks soft drinks consumes five-and-a-half 12-ounce cans a day, or about 800 calories worth. It's not the only reason, but the increase in soda consumption since the 1970s certainly helps explain why obesity rates have tripled in teens.

We all need food, but no one needs soda. Soda is basically liquid candy, providing empty excess calories without needed nutrients. (The same is true for "fruit drinks" with little juice, so-called "energy drinks" like Red Bull, "sports drinks" like Gatorade, or gimmicky products like VitaminWater.) Besides promoting obesity and disease, soft drinks displace real foods with redeeming health-promoting properties. In fact, in the 1970s, teens drank about twice as much milk as soda. By the 1990s, teens drank twice as much soda as milk. That trend has been reinforced not only by the ubiquitous availability of soft drinks and the ballooning sizes of containers, but also by economics: soda keeps getting cheaper compared to real food.

To some critics, soda taxes are a radical new idea. "We can't live anymore," bemoaned Fox News' Sean Hannity. I don't know if he lives in New York or whether he drinks soda, but if he does, he already pays soda taxes, perhaps without knowing. New York is one of two dozen states that levy small taxes--usually just special sales taxes--on soft drinks or snack foods. Arkansas, California, West Virginia and the city of Chicago are others that do. Those taxes are designed solely to raise revenue and the revenues aren't earmarked for health programs, but they've been around for a while.

Congress should do it differently. A federal excise tax on non-diet soft drinks of one cent per 12-ounce can would raise $1.5 billion per year, and might reduce consumption by 1 percent. A tax of one cent per ounce--as has been suggested by New York City Health Commissioner Tom Frieden (since named to head the Centers for Disease Control and Prevention) and Yale obesity expert Kelly Brownell--would raise about $16 billion a year. That kind of a tax would reduce consumption by more than 10 percent and help reverse the obesity epidemic.

Others will claim that a soda tax is regressive. That's true as far it goes, but don't look for this argument from anti-poverty advocates. If we're using soda tax revenues to help pay for expanded health care coverage and for prevention, lower-income Americans will enjoy the biggest share of the benefit.

Members of Congress crafting health care reform legislation have a difficult job ahead of them. Among other things they have to raise $1.2 trillion over the next 10 years. A tax on soft drinks might get a tenth of the way there. Raising excise taxes (which have been eroded by more than one-third since they were last raised in 1991) on alcoholic beverages could get you another tenth of the way there. But unlike payroll taxes, income taxes, or taxes on employer-sponsored health benefits, a soda tax itself would promote health and reduce health care costs. True conservatives should join liberals in seeing the value in that, even if Sean Hannity doesn't.

 

 

Comments

[ebodnaruk]

This is a truly great idea. Although there are many other causes of obesity and related health problems as Dr. Jacobson points out, soda is a significant and obvious part of it. Also think how much advertising goes into soda, how soda machines are so prevalent at every middle and high school in the US! This is an example of companies manufacturing desire for an unhealthy and unnecessary product, and using corporate power and leverage to place it in locations where kids abound (these vending machines raise money for schools but don't promote the overall health of kids!) I've heard stories of how it was difficult to remove Coca-cola products from schools in a movement aimed at raising awareness of injustices at Coca-cola factories in South America. (just as an example of the power of soda companies)

I know this is an extreme comparison, but there are some similarities to tobacco/cigarettes and youth (let me stress that there are SOME comparisons, and not as strong, but still are there).

Anyway, raising money for healthcare through a tax on a major dietary source of healthcare costs is wonderful, and could potentially reduce the demand for it slightly without effectively banning soda through huge taxes that would never be politically feasible.

I hope this happens!

[Bill Felling]

If obesity is caused by eating more calories than are burned, why pick on soda - why not have a calorie tax? That way donuts, and klondike bars, and milkshakes at McDonalds will all get their fair share, no? And imagine how much money you can raise - there are about 300,000,000 people in America these days, and they each eat at least 1,000 calories a day. At $0.01 per calorie, that's $3,000,000,000 (3-billion dollars) per DAY. Or over one-trillion dollars per year - now we're talking real money! And what an incentive for people to lose weight! If you're eating 2,000 calories per day, and you cut back to 1,000, then you're saving $10 per day, or $3,650 per year! That will get people's attention! After all, people are already paying taxes in one form or another on most of what they eat anyway, so what's a few dollars more?

[chipmunk12]

A soda tax sounds great. I agree with other comments that it should include diet sodas as well. These kind of beverages are far too cheap and one reason is probably because refined sugar is so cheap. If refined sugar would have a tax it would create more money and the price of drinks that have a lot of refined sugar in them would automatically go up. I agree there should also be a tax on high fructose corn syrup. Both the sugar and the syrup cause the blood sugar to go up quickly and contribute a great deal to diabetes and obesity. The money generated from this tax should be spent wisely on education, research and should pay for part of the health costs. Education is very important I think. A lot of people don't know the kind of damage it does to their body. Many people don't even realize that sugar is addictive and that you have to make a real effort to get off it. In my eyes refined sugar is a kind of poison.

[JFTortorella]

Michael, I support your idea to tax sugary drinks, just so it is not expanded to include diet drinks. Also, I feel that beer, wine and hard liquor should be taxed a lot more, for the same line of reasoning. Alcohol certainly contributes to obesity, and causes so many other health problems. It also causes many fatal accidents. These taxes may be regressive, but certainly well-to-do people consume substantially more than poor people, simply because they can afford to buy more. Paying for expanded health care will involve sacrifice; there is no painless way to do it. Increasing taxes on harmful things such as sugary drinks, alcohol and tobacco serves a two-fold purpose. Please keep pushing for these things!

[Michael F. Jacobson - Huffpost Blogger]

I agree. Sugary drinks of all kinds should be taxed, whether they are fruit drinks (which usually have only a tablespoon or two of actual fruit juice), sports drinks, energy drinks, and the like. Diet drinks should not be taxed, because they are less harmful than regular soft drinks. However, there certainly are safety questions about some of the ingredients: aspartame/­acesulfame­-K, saccharin (possible carcinogens), caffeine (a stimulant that kids don't need), acids (which can erode teeth), and dyes (hyperactivity).

[Wellness101]

I agree with many of the other posters that diet sodas should also be included-- ALL soft drinks should be taxed, not just sugary ones. Otherwise, the wrong message will be sent to consumers, who may believe diet soda is an acceptable, safe alternative to sugary soda. I believe the artificial sweeteners make diet soda even more harmful than regular soda.

[consumerguy]

Michael,
As a consumer advocate and CSPI member, before I approve of your proposed tax on soda, I have to know how you define "soda." I drink lots of seltzer - simple carbonated water, like club soda but without the added salts. I also drink Juice Squeeze which is 70 percent juice and 30 percent seltzer.
As you probably know, there are a lot of junky drinks that contain 10 percent juice plus artificial colors, artificial flavors, sweeteners and assorted junk but qualify as food by federal standards and are not taxed in most states.
Juice Squeeze, seltzer, club soda and sparkling mineral water are frequently taxed and do not qualify as food (evidently governments hates bubbles).
So if you are precise about the sodas you are talking about - sweeteners, colors, nutritional value, etc. - I support you. As a matter of fact, why not tax all beverages with added sugars and syrups that contain less than 50 percent juice? The 10-percenters are no better than Dr. Pepper.

Ellis Levinson (The Consumer Guy)

[devra]

Taxing the "bads" to support the "goods" makes a lot of sense. The dirty secret about diet soda is that it can stimulate the appetite. Whether diet or sugar based, soda also becomes a vehicle for fat-stimulating chemicals to leach into liquids from the linings of cans and plastic bottles. Programs to stave the obesity epidemic must address all the sources of obesity, not just what and how we eat and drink, but the way that schools and cities are designed to discourage movement and exercise and the absence of public transportation and facilities for walking and biking safely.

[Grtmkr]

We already have sin taxes on cigarettes and alcohol, both of which could also be called regressive. And we tax gasoline to pay for related expenses (road improvements, etc), although not enough to offset its overall costs to society. Both of these are precedents for taxing sugared drinks. A confusing implementation issue would be where you buy a fountain drink and they hand you a cup (like many restaurants, fast food places, and convenience stores). If diet sodas were cheaper after tax, everyone would order a diet but then may or may not serve themselves the diet offering.

[richandwil]

Mike,

It’s good to see you working on this issue. I agree with you about one thing, obesity is one of the most pressing public health issues in this country. One problem with trying to solve the problem that I have found after decades of studying it is that there are as many solutions (and causes) of obesity as there are people studying it. Unfortunately, not all of the solutions work and I just don’t agree that this is the answer. I have a short paper on this at
http://mercatus.org/PublicationDetails.aspx?id=27272. One thing appears to be certain about obesity, weight gain is the result of more calories being taken in then being burned. Basically, eat better foods, eat less and exercise more and most people know it and claim they don't have the willpower.

Certainly one problem with these kinds of taxes is that they are regressive. Even if you assume that poor people drink the same amount of soft drinks per person as others, this tax will be a bigger percentage of their income. For example, CDC reports that 2/3 of people that are below the poverty level are overweight or obese with about half of those being obese (35%). If sweetened soda’s were the problem, we would be taxing the poorest among us - in hopes that they will switch to tap water? If fact, the studies I examined show that any reasonable tax just won’t have much of an effect on obesity.

[awnypawns]

I as well agree that a soda tax would be a great way to pay for the costs of obesity related diseases and health care. This tax should be included for diet sodas as well! Artificial sweeteners are just as dangerous, if not more dangerous as corn syrup and have no place in our bodies. Although the artificial sweeteners may not be as linked to obesity as sugar, we know they are harmful when consumed in frequent quantities and the diet soda drinker are just as addicted to their fizzy soda drink and the sugar soda drinker. Besides taxing the sodas, more education is needed to our public on the harms to their health, and we need to tax the producers and marketing teams of sodas, junk food producers, and so on. Most diet soda drinkers actually believe they have made a healthier choice when drinking a sugar free drink.

[Vickster]

In my opinion, we don't need any more "sin" taxes.

[Suzie Forton]

MICHAEL F. JACOBSON,
I give you a thousand kudo's and more.
A tax on sugary drinks and "all" junk food is way overdue.
Good for you, for your beliefs and doing something about them.
Thank you for pursuing this tax which is very much so needed.
TAKE CARE,
~SAUSS~

[Mom2BandC]

I'm in favor of a federal soda tax, IF it includes diet beverages as well. Soda is a lousy beverage due to it's sugar content, AND because it replaces better choices such as water, milk or 100% juice.

[Mugzi]

Why stop with sodas and go to the main culprit...a sin tax on sugar and sugar-less sweetners!!!!!

[mataja2004]

Think it's a great idea, but think the tax should be on diet beverages, as well, due to the chemical sweeteners.

[tdillion]

My first response is that it is a great idea. We should tax sugar, (including sugar-like products such as high fructose corn syrup) just like we tax tobacco and alcohol, and use the revenue to provide medical care for the uninsured. But then some would argue that meat is bad for you, or pasta, or eggs, or tuna, etc. It seems the science of nutrition is very primitive and consists of many contradictory theories. Most of our medical doctors know very little about nutrition. So who will decide what foods should be taxed more than other foods?

I must admit that it irritates me that my husband pay less for twelve 12-oz cans of soda than I do for two good 8-oz juice drinks (unsweetened, 100% antioxidant juice, no preservatives). Maybe a high tax on sugar and artificial sweeteners would even things out a bit. The companies who make these unhealthy products should pay taxes on the ingredients, which would force them to charge more for their unhealthy products.

If we do that, some of the money raised should go toward serious scientific research to help define clearly what healthy human beings should eat and to educate the public. Tax the companies who use unhealthy ingredients in their products, which will force them to charge more for their products.

[Mykel Board]

I agree with akpernil that this is a bad idea. It would drive more people to so-called diet drinks with artificial sweeteners that are even less healthy than sugar. This proposal will only make it seem like the government endorses the unsafe (and fattening!) "diet" drinks. If we want to make a social policy to shift people toward more healthy drinking... and collect some bucks while doing it... the government should tax ALL soft drinks except juice and water.