Subscribe

Building a better soda tax

The negative health effects of consuming sugar are a principal rationale for the new soda taxes. But the taxes have a design weakness: Instead of taxing sugar, they target drink volume.

  • close
    Soft drink and soda bottles are displayed in a refrigerator at El Ahorro market in San Francisco.
    Jeff Chiu/AP/File
    View Caption
  • About video ads
    View Caption
of

Soda taxes won big at the ballot box in November. Voters in Boulder, Colorado, and three California cities (Albany, Oakland, and San Francisco) approved new taxes on sugary drinks. In Illinois, Cook County adopted one soon after.

The negative health effects of consuming sugar are a principal rationale for the new soda taxes. But the taxes have a design weakness. Instead of taxing sugar, they target drink volume. Oakland, for example, will tax sugary drinks at a penny per liquid ounce. That approach has the benefit of simplicity. But as Norton Francis, Kim Rueben, and I explore in a new report, it is blunt to focus on the drink rather than the sugar.

A better approach would be to link taxes to a drink’s sugar content. That content varies widely. A regular cola might have seven teaspoons of sugar in an 8-ounce serving, while an iced tea might have only two. Taxing those drinks at the same rate discourages soft drinks generally, but does nothing to encourage consumers to switch to less sugary options. Nor does it encourage businesses to develop and market lower-sugar options. Basing soda taxes on sugar content, in contrast, gives both consumers and businesses an incentive to switch to lower-sugar products.

Recommended: 'A Spoonful of Sugar': 7 stories from a British nanny

Several countries have already taken this approach. Hungary, for example, targets its volume-based sugar tax at drinks with particularly high sugar content. The United Kingdom will have two volume-based taxes, one on medium-sugar drinks and a higher one on high-sugar drinks. And South Africa recently announced a tax based on added sugar content.

Sugar content is usually straightforward to measure—it’s listed on nutrition labels. As a result, most cities and counties that want to tax soda should find it feasible to link taxes to sugar content, unless they run into state limits on their taxing authority.

As I’ve noted before, soda taxes are a limited tool for improving nutrition. Well-designed taxes can discourage consumption of sugary drinks, which clearly contribute to obesity, diabetes, and other ills. But health depends on many factors, not just the amount of sugar one drinks. People may switch to other, tax-free alternatives like juice that also have lots of sugar.

Soda taxes also are regressive, falling more heavily on lower-income families. And they raise controversial questions about the role of government in our personal lives.

Given those concerns, reasonable people differ over whether such taxes make sense. However, if governments choose to enact them, they should target them as precisely as possible to the harm they are meant to reduce. For sugary drinks, that means targeting sugar, not drink volume.

This story originally appeared on TaxVox.

The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on taxvox.taxpolicycenter.org.

 
 
Make a Difference
Inspired? Here are some ways to make a difference on this issue.
FREE Newsletters
Get the Monitor stories you care about delivered to your inbox.
 

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.

Loading...

Loading...

Loading...

Save for later

Save
Cancel

Saved ( of items)

This item has been saved to read later from any device.
Access saved items through your user name at the top of the page.

View Saved Items

OK

Failed to save

You reached the limit of 20 saved items.
Please visit following link to manage you saved items.

View Saved Items

OK

Failed to save

You have already saved this item.

View Saved Items

OK