Sin taxes: Financing health care with soda pop

Sugary soft drinks are under attack from obesity experts, health commissioners, nutritionists, Congress, and President Obama. And the soft drink industry is fighting back.
Health experts have proposed a tax on soft drinks of one cent per ounce. That’s an extra 12 cents on a 12-ounce bottle of Pepsi, which may not sound like much, but it adds up. If a two-liter (67.6 ounces) bottle of Coke sells for $1.35, the price would go up 50 percent.
Health experts claim the tax could cut consumption by 10 percent and, they hope, reduce obesity. Even if the tax had no impact on weight gain, there’s the appeal of generating $15 billion a year in revenues.
Congress likes the idea of a tax on soft drinks because they could use the money to finance health care. The Congressional Budget Office did an estimate last December on a less drastic federal excise tax — three cents for every 12 ounces — and came up with a projected income of $50 billion over ten years. Currently there’s no amendment taxing soft drinks in either the House or Senate versions of the health care reform bill. But that battle isn’t over yet.

President Obama: “Our kids drink way too much soda”

President Obama discussed sin taxes – taxes on soda and other high-sugar products – in Men’s Health magazine last July. He had this to say: “I actually think it’s an idea that we should be exploring. There’s no doubt that our kids drink way too much soda. And every study that’s been done about obesity shows that there is as high a correlation between increased soda consumption and obesity as just about anything else. Obviously it’s not the only factor, but it is a major factor. … [I]f you wanted to make a big impact on people’s health in this country, reducing things like soda consumption would be helpful.”
Here’s a report on the interview from MSNBC.

It won’t be easy to impose a federal tax on soft drinks. There will be opposition from states that produce corn syrup and states with bottling industry employees. It’s much more likely that individual states will impose taxes. Currently, 33 states tax soft drinks. The taxes aren’t large enough to discourage soda consumption, but state governments are grateful for revenue wherever they can get it these days.

The beverage industry fights back

If you increase the price of a product by 50%, you can expect sales to go down. So it’s no surprise that companies threatened by sin taxes are getting together to protest.
A group called Americans Against Food Taxes (AAFT) bills itself as a coalition of “responsible individuals, financially strapped families, small and large businesses.” The “individuals” and “families” part might sound like typical astroturfing: Pretending to be a spontaneous, “grassroots” campaign when it’s actually a commercially orchestrated simulation of the real thing. But AAFT doesn’t hide its commercial roots.
Backers include sugary juice maker Welch’s, soft drink company PepsiCo, the American Beverage Association, the Corn Refiners Association, and soft drink retailers McDonald’s and Burger King. The huge list of coalition members includes 7-Eleven, American Airlines, Bowling Centers Association of Wisconsin, Midwest Dairy Foods Association, and the National Association of Theatre Owners.
The coalition also includes a large number of organizations with the words Hispanic, Latin, Latino, Puerto Rico, or NAACP in their title. The AAFT likes to hammer home the regressive nature of sin taxes: They hurt the poor more than the rich. (This is a very popular argument in these financially strapped times. Cosmetic surgeons are using it to fight the “Botax.”)
Here’s a sample commercial.

Here’s another one.

You can see how the economic downturn adds a sympathy factor to the anti-sin tax cause. At the same time, however, hard times are good news for tax proponents. They know that states are desperately in need of more revenue and that taxes are very attractive. As obesity expert and sin-tax advocate Kelly Brownell says: “What’s makes this idea sort of have legs at the moment is the terrible economy.”

Who’s right?

One reason Americans Against Food Taxes emphasizes the economy may be the lack of a good scientific argument to support its cause. But then it’s not clear that science is on the side of the tax proponents either. They can get a bit evasive when pushed.
Michael Jacobson is executive director of the Center for Science in the Public Interest, an advocacy group strongly in favor of the soft drink tax. He comments: “I think we should be satisfied that soda taxes would be having a modest effect on consumption but would generate billions of dollars that could be used to mount public health campaigns.”
Kelly Brownell had this to say in an interview with Science News:

“[T]he science linking soft drinks to bad health is consistent and robust. And is stronger than exists for any other categories of foods.” Like fats, I asked him? “Well, to some extent those other things haven’t been studied as much. But that’s why the soft-drink link pops up: It’s the most defensible thing from a scientific point of view.”

Not exactly a strong argument, is it?

Solving the complexities of health care with a tax on soda pop

I predict that neither side of this argument will win public support by citing scientific evidence. The recent increase in obesity is a much more complex issue than lung cancer and cigarettes. It will take a long time to sift through the correlations – soft drinks, inactivity, fast food restaurants, eating out, portion size, advertising, genetics – and identify the causes. Meanwhile both sides appeal to our emotions and our pocket books.
Kevin W. Keane, senior vice president for public affairs at the American Beverage Association, makes a good point when he says: “The bottom line is that the tax isn’t going to make anybody healthier. It’s not going to make a dent in a problem as complex and serious as obesity, and we’re certainly not going to solve the complexities of the health care system with a tax on soda pop.”

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The So-Called Obesity “Epidemic”
Sanjay Gupta a victim of obesity myths?
The Pepsi challenge: How beliefs affect what you taste
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Calories: What are we really counting?
This is your brain on sugar — and sugar substitutes
Why do we love high-fat foods?
After health care reform, will Big Insurance be the enemy of Big Food?
What’s wrong with our food?