Taxing Soda

Experts argue that soda should be taxed because it is the leading cause of obesity and a host of other problems that create unnecessary healthcare costs. Although a considerable body of research supports that argument, a just-as-considerable body of resea

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Taxing Soda

Sugar and politics have mixed for over ten thousand years. Sugarcane was domesticated in present-day New Guinea as early as 8000 BC before it spread to Persia and the Mediterranean. As demand grew in the fifteenth and sixteenth centuries, Europeans carried sugarcane to the New World, along with colonial governments, slave labor, and the plantation business model. It soon joined other goods on the trade routes that crisscrossed the Atlantic Ocean. Sugar substitutes like high fructose corn syrup—and all the controversies associated with them—developed much later.1 Yet it was not until the end of the twentieth century that paternalists turned a critical eye toward sugar. They believed it caused the secular sins of weight gain and obesity, which studies linked to an elevated risk of diabetes, cardiovascular disease, certain types of cancer, and even some mental health conditions. In light of the healthcare costs and other externalities obesity was assumed to impose on society, paternalists called for everything from government dietary guidelines to a tax on foods and beverages they believed were behind the oft-mentioned obesity epidemic.2

1 Sugar was not always tax-free during that time; like other commodities, it was often subject to tariffs. More comprehensive discussions of sugar’s political history are found in Abbott (2008), Parker (2012), and Taubes (2016). 2 It may seem like mere semantics, but the sustained increase in obesity means that it is a pandemic, not an epidemic.

© The Author(s) 2021 M. Thom, Taxing Sin, https://doi.org/10.1007/978-3-030-49176-5_2

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But not all foods and beverages. Paternalists were especially sour on sugar-sweetened drinks. And while some beverages such as fruit juices and flavored coffee escaped heavy scrutiny, soda was not so lucky. Before long, obesity was rarely discussed without reference to soda. Instead of banning it, however, paternalists argued for a soda tax. They said a tax would nudge consumers toward less sinful beverage choices, reduce sugar consumption, and generate government revenue to counteract obesity’s externalities. The tax was also pitched as an effective way to break an unhealthy habit rooted in cognitive biases, and as a way to fight back against the beverage industry—pejoratively nicknamed “big soda”—and its heartless exploitation of thirsty consumers. Soda paternalism spread like wildfire. The World Health Organization urged policymakers to fight obesity with taxes. A press release issued by the Organization on World Obesity Day 2016 even provided suggestions on how policymakers might rally public opinion.3 Other public health groups, including the American Medical Association, the American Heart Association, and the American Academy of Pediatrics, also endorsed soda taxes. Experts championed soda paternalism in academic journals.4 One expert wrote a book about “taking on big soda.”5 Three others argued in a Los Angeles Times column that a tax could save “millions of lives.”6 In the New York Times , Nobel Prize-winning economi