Thursday, July 9, 2009

Taxing Soda Pop?

Cover of the Liquid Candy report, showing a fattened Coke bottleI'm not sure if this belongs in my "part of the solution" category or not, but did anyone else hear about Michael Jacobson's idea to tax soda pop?

Jacobson, head of the Center for Science in the Public Interest (CSPI), has a history of making headline-grabbing pronouncements about nutrition. I believe he's the one who coined the term "heart attack on a plate" when describing fettuccine alfredo.

Depending on how Jacobson's tax was implemented (two possibilities he listed were 1 cent per container or 1 cent per ounce), it would raise between $1.5 billion and $16 billion. In theory -- especially at the steeper end of the tax scale -- it would begin to cut consumption. And the revenue would go to funding increased health care access (price tag for that, so far: $1.2 trillion).

Of course, any tax on consumption (i.e, a sales tax) is inherently regressive. But as Jacobson points out,

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.
I'm not so sure either amount of taxation would have a big effect on consumption. Like gas prices, I think it will take a pretty big change in the price to alter people's behavior. So doubling the price would have a noticeable effect, but increasing it by a cent an ounce probably wouldn't. Although, since the proposed tax would not apply to diet sodas, some people might switch (rather than stop drinking it altogether).

CSPI's report on Liquid Candy includes a lot of stats on how much soda teens, in particular, consume. My favorite takeaway is this graph, comparing the change in milk vs. soda consumption in just 20 years:

Graph showing large increase in soda consumption and drop in milk consumption
Can you say "marketing"?

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