I drink a lot of soda.
I mean, a lot of soda. In fact, the only beverages I seem to drink any more are Coke products, coffee and tea. I drink at least one glass of water every day, but most of what I drink is some form of manufactured beverage.
According to a report in the New England Journal of Medicine, I should have to pay a great deal more for what I drink. Last night, I bought two 2-liter bottles of Coke products. They cost me about $3. If we were to adopt the 1-cent-per-ounce tax on sugary beverages recommendation of the NEJM, I would have to pay another $1.38 for those 2-liters. The argument they make is that, like cigarette taxes, the tax on sugary beverages would reduce consumption and improve America’s overall health.
From the Wall Street Journal:
The paper, by seven experts in nutrition, public health and economics, called for an excise tax of a penny per ounce on caloric soft drinks and other beverages that contain added sweeteners such as sucrose, high-fructose corn syrup or fruit-juice concentrates. Such a tax could reduce calorie consumption from sweetened beverages by at least 10% and generate revenue that governments could use to fund health programs, the authors said.
“The science base linking the consumption of sugar-sweetened beverages to the risk of chronic diseases is clear,” the authors wrote. “Escalating health-care costs, and the rising burden of diseases related to poor diet, create an urgent need for solutions, thus justifying government’s right to recoup costs.”
There’s just one problem: Caloric intake is not the sole measure of “poor diet,” nor is poor diet the sole reason for poor health. Lack of physical activity, other habits like smoking, drinking, drug abuse, chronic dehydration, lack of minimal sun exposure (for Vitamin D) and others also have a cumulative lifetime effect on people’s health. Simply cutting people’s intake of sugary beverages will not, on its own, solve the obesity problem in the United States.
Further, if caloric intake is such a serious problem, why not go after the source? Why not tax refined sugar, high-fructose corn syrup and other high-calorie additives?
The answer is obvious: The agricultural industry would throw a fit! Most of those additives are actually refined agricultural products. Taxing them directly would earn the ire of that industry, which can be political suicide. Attacking the beverage industry, however, is politically feasible, just as attacking “Big Tobacco” by cigarrette taxes was easier than taxing tobacco farming directly.
Adding this tax would seriously affect the soft-drink industry, which produces not just soft drinks but sports drinks, coffee drinks, fruit drinks and bottled water. With higher prices will come reduces sales, which will cause thousands of people in that industry to lose their jobs.
Again from the Journal:
Beverage-industry executives vehemently oppose the idea, which experts say would result in significant price increases. Coca-Cola Co. Chairman and Chief Executive Muhtar Kent called the proposed tax “outrageous” in a speech Monday in Atlanta, saying it reminded him of his days as a Coke executive in the former Soviet Union, when he watched the government dictate consumers’ choices by stocking only one type of fruit in a store at a time. “I have never seen it work where a government tells people what to eat and what to drink,” he said. “If it worked, the Soviet Union would still be around.”
Well, that’s a bit of an exaggeration, but the basic concept is sound: Central planning of anything by those who are not directly affected by the results never works. This results in unhappy consumers and shortages of desired goods. The article continued:
“A penny per ounce would have a seriously negative impact on the industry, as it could potentially raise prices on key packages by 40% to 50%,” said John Sicher, editor and publisher of Beverage Digest, an industry publication.
PepsiCo Inc. and Coke referred questions on Wednesday’s report to the American Beverage Association, a trade organization. Spokesman Kevin Keane said a federally funded study, also published earlier this year in the NEJM, supports the notion that all calories count, and the key to a healthy lifestyle is balancing consumption with exercise.
“It makes no sense to single out one particular food product as a contributor to obesity when science shows that’s not supportable,” Mr. Keane said.
Taxing soft drinks only makes sense if it is a prelude to attacking all “unhealthy” foods. Simply reducing soft-drink intake is not going to cure the nation’s obesity ills.
No matter how many people exchange soft drinks for other beverages, the costs will be massive: Lost jobs, lost productivity, reduction in economic output and greater dependence on government to make our choices for us.
So just ignore the idea of personal responisibility. Just ignore the idea that people should be allowed to make their own choices and live with the consequences. Just ignore the fact that lifestyle (such as exercise and other habits) has more to do with health than soda consumption. None of that matters. We have an obesity crisis, and the only way to cure it is to stop people drinking soda!
Oh, all that soda that I mentioned earlier that I drink? The vast majority of it is artificially sweetened. This tax would not affect me.
Cross-posted at TMR.