Save Lives, Tax Soda

by guest blogger Wendy Gordon, pioneer in the green consumer movement

Forty-five can be a sizeable number. Especially when it’s the number of gallons of sweet beverages the average American consumes in one year. This jolting news was reported in a new study published in the January 2012 issue of Health Affairs.

How much sugar comes with all that? About 4,500 teaspoons per person per year just from soda. Consumption of beverages that are high in calories but poor in nutritional value is the number one source of added sugar and excess calories in the American diet. It’s also fueling America’s soaring obesity and has pushed diabetes to the top of the charts; it’s now Number 7 on the “cause of death” list.

More than one-third of U.S. adults (over 72 million people) and 17 percent of U.S. children are obese. The crushing healthcare costs associated with obesity—estimated to be as high as $147 billion a year—prompted the U.S. Centers for Disease Control and Prevention (CDC) to list reducing the intake of sugary drinks as one of its chief obesity prevention strategies in 2009.

As an intervention, several states and cities, including California and New York City, have considered a tax on soda, but have yet to impose one. Maybe now they might. The new study, led by Kirsten Bibbins-Domingo, MD, PhD, an associate professor of medicine and of epidemiology and biostatistics at University of California–San Francisco (UCSF), estimates that a penny-per-ounce tax on sweetened beverages would prevent 240,000 cases of diabetes per year.

On top of that, the researchers calculate, nearly 100,000 cases of heart disease, 8,000 strokes, and 26,000 deaths would be averted over the next decade, for a healthcare cost savings of $17 billion.

A penny-per-ounce tax would add 78 cents to the price of a standard two-liter bottle of soda. Depending on where you bought it, you could pay 25 to 100 percent more for that economy-size bottle. That may seem to tip the scales too much, but as a 2004 report prepared for the Department of Agriculture explains, for “sinful-food” taxes to change the way people eat, they may need to equal at least 10 to 30 percent of the cost of the food.

And what sort of revenues would the tax generate? Dr. Bibbins-Domingo and her team project that $13 billion per year could be raised from a one-cent-per-ounce tax on soda. Those revenues could be used to extend health insurance coverage to the uninsured and underinsured, or perhaps to fund campaigns intended to make healthy foods more widely available and more affordable, and to encourage exercise and healthy eating habits.

A recent national poll found that 53 percent of Americans said they favored an increased tax on sodas and sugary soft drinks to help pay for healthcare reform. And even among those who opposed such an idea, 63 percent switched and said they’d favor such a tax if it “would raise money for healthcare reform while also tackling the problems that stem from being overweight.”

I’d like to see the U.S. really face the serious consequences of our out-of-control obesity epidemic and consider tough interventions, like a soda tax, or perhaps a fat tax, as is taking hold in Europe. According to a report posted on allgov.com, Europe is beginning to embrace the concept of a “fat tax” in an effort to reduce the incidence of obesity and the condition’s associated healthcare costs.

In September of 2011, Hungary, with a 19 percent obesity rate, imposed a tax on packaged products with high sugar, salt, or caffeine levels. This includes energy drinks with added sugar and caffeine, soft drinks with added sugar, and soup and gravy mixes. The Hungarian government estimates it will collect $100 million a year from the food tax. It will apply the funds to the nation’s healthcare budget.

Now Denmark has followed with the first-ever tax on foods high in saturated fat. The fat tax, which will be levied on wholesalers, will come to about $6.27 per pound of saturated fat. This will mean an additional 40 cents for a hamburger and 12 cents for a bag of chips.

According to the Los Angeles Times, Denmark’s fat tax isn’t aimed at curbing obesity—the obesity rate in Denmark was 13.4 percent in 2009, below the European average of 15.5 percent. But Denmark lags in life expectancy, and the country hopes the measure will increase its citizens’ average lifespan by three years over the next decade.

Imagine that sort of initiative on the part of our U.S. Congress. Ah, heck, don’t bother. But maybe in some state house or city council, a civic-minded leader is saying right now, “We’ve got a real problem here. We’ve got people who are obese costing our health system $1,429 more per person than normal-weight people. They’re less productive at work and are absent more. That’s hard on our businesses, and it’s breaking our treasuries. We know soda is a major contributor to obesity. Let’s not take the soda away, but let’s price it so less is consumed.”

That’s what we could do, though it is not how our tax system works now. Today, as Derek Thompson of theatlantic.com explains, 40 percent of federal taxes come through the payroll tax, which raises the cost of employment. Another 40 percent comes through individual income taxes, which hurt income. Less than 5 percent comes from excise taxes, and 0 percent comes from consumption taxes.

“What’s dumber than a tax on cake?” Thompson asks. It’s the system we’ve got now.

I say, let’s make 2012 the year we get smart about taxes, and tax less of those things we want more of—like jobs and income—and more of the things we want less of, like health-damaging sugars. You can have your cake; just pay for it.

Wendy Gordon is a leader in the green consumer movement. She founded Mothers & Others for a Livable Planet and Green Guide, a resource for the eco-conscious consumer. She is now a consulting editor for OnEarth and the Natural Resource Defense Council.

 

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9 Responses to Save Lives, Tax Soda

  1. Paula January 17, 2012 at 6:32 am #

    Why always tax (“punish”) consumers? Why not start with the source – the manufacturers? (And while we’re at it, let’s go after the same companies for selling overpriced tap water.)

    Why create a source of income for the government that will lessen as people (hopefully) start drinking less soda? In such a system, the government could be in the weird position of promoting soda drinking (or supporting soda manufacturers) in order to collect more revenue. Don’t think it couldn’t happen. How often have other “sin taxes” increased?

  2. Taracy January 17, 2012 at 9:58 am #

    This concerns me. Supporting more government control over our food supply? Do you think it has to do with the fact that corn syrup (sugar) in soda is now 100% GMO and loaded with pesticides, flouride and other chemicals? Oh maybe you didn’t realize this because the government doesn’t label it. Did the scientists even mention the plethora of chemicals besides sugar in soda in their study? If you are going to condone a tax on unhealthy food then it should be on everything that’s overly-processed GMO and non-organic. The public needs to wake up to all the chemicals we are consuming and realize that the body converts these poisons to fat because it can’t eliminate them all. While soda may be unhealthy, you can’t just blame one consumable. Am I the only one who thinks this is silly?

  3. Kristi C January 17, 2012 at 12:40 pm #

    I have to say, I agree with the above comments. Just as govt. now pushes pharmaceutical drugs in their allopathic medical programs because, let’s face it, we all know that the FDA, AMA, ACS, etc. get kickbacks from the drug companies. The gov’t. will want those tax dollars so it will push sugary items as “safe” and “healthy.”

    I also have to comment that half of this article is ludicrous. Wendy should know that healthy saturated fats do NOT make people fat – it’s the sugar. A tax on items with saturated fats is a sin in itself! Google the studies or try it for yourself – cut the sugar completely out of your diet and eat unlimited fats from butter, coconut oil, and fats from healthy-raised animals, such as grass-fed beef, org. free range chicken and eggs, lamb, wild-caught salmon, etc. You will lose weight.

    The sin is NOT in the saturated fats – it’s most definitely in the sugars!

    Kristi Cooke, Nutritional Therapy Practitioner

  4. SJ January 17, 2012 at 6:25 pm #

    no more taxes. repeal some laws. don’t make more.

    It’s time our government learned it’s place and freed up the capitol; so people can thrive on their own hard labor. Personal responsibility will do far more to make America healthy; whether we are talking about our bodies or the economy. However, these chat places are great places to educate people and help them make better choices.

  5. Wayne Campbell January 18, 2012 at 10:29 pm #

    No soda or snack tax. First of all people need to be educated, and lets start with adults and educators. Taxing will not solve this. Secondly why would you single out one industry. Are you going to tax butter next? Cream? Hit the whole dairy industry. And the list goes on and on.

  6. Chrissy January 19, 2012 at 2:09 am #

    Are we seeing cigarette taxes actually helping health care costs? or deter people from smoking?

  7. T. Katz January 19, 2012 at 11:41 am #

    Is this tax aimed at making people healthier or just another way of adding more taxes that are spent on other issues? I would like a tax that is aimed at all the canned and plastic bottles we see littering our neighborhood. Iced teas, bottled water, energy drinks, soda, chocolate and yogurt drinks as well. The tax revenue on these items should be used to educate people to avoid producing more landfill garbage by buying bottled tap water and instead carry their own refillable bottle. Currently only soda and water have a deposit to encourage returns, iced teas, energy drink cans and other fly under the radar. The key is avoiding what is unnecessary instead of recycling.

  8. T. Katz January 19, 2012 at 11:45 am #

    Why does the govt stop paying subsidies to corn/and fructose corn syrup production and production of other unhealthy farm food. Immediately all those products might naturally get more expensive.

  9. KT January 20, 2012 at 10:31 am #

    I was just about to say what T. Katz meant to say — Why NOT stop subsidies to corn production? Then the market would regulate the price instead of it being unnaturally low as it is now.

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