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The Case Against Taxing Soda

Posted: 11/15/2012 12:35 am

Can we tax ourselves to better health? Many think the answer is yes. New York Mayor Michael Bloomberg champions a tax on soda; two California towns recently put the idea up for referenda; the Ontario Medical Association favours taxing sugary and fatty foods. (And, hey, the news from Europe: French lawmakers consider a Nutella tax.)

On this, we can all agree: North Americans are becoming very unhealthy. Obesity rates on both sides of the 49th parallel have soared, with one in four Canadians now qualifying as obese (American stats are even worse).

For much of the last century, medicine was all about fighting diseases like polio and smallpox. In this century, lifestyle choices and chronic illnesses have become major medical problems -- and cost drivers. Rising obesity rates mean an epidemic of diabetes, cardiac disease, and slew of other avoidable problems, and their associated costs. "Fat," as the Financial Times quipped, "is a financial issue."

It's not surprising that so many champion ideas to trim our waists. The biggest target? Soda. Many North American experts now claim that soda is the new tobacco -- indeed, Google those terms and you get more than 7 million hits. For them, Coke is the new Camel. Yale's Kelly Brownell claims that "[soda companies] are using many of the same tactics that tobacco companies used." Heavy rhetoric? Dr. Thomas Farley recently made a similar point and he's New York City's health commissioner.

And thus, people on both sides of the 49th parallel favour a war on soda. Writes Western economics professor Mike Moffatt: "soft drinks provide little to no nutrition, so it is easier to implement a specific tax on them than on all junk food. A tax on pop would more closely resemble the sin taxes on alcohol and tobacco." But as I point out in a paper released today by the Montreal Economic Institute, a soda tax would be bad idea.

Let me take a step back and note the basic problem in fighting obesity like we fought tobacco.

1. The times are different.

When the Surgeon General issued his landmark report in 1964, millions of North Americans made no connection between tobacco and cancer. We live in the age of Google -- people know far more about their health. I've never met a patient who thought copious amounts of soda led to more healthful living.

2. The product is different.

Tobacco is never good for you. There is no right amount of tobacco; it does nothing but increase the risk of cancer and other diseases. Soda -- like eating cake or a slice of pizza at lunch -- can be part of a balanced, healthy diet.

And, thus,

3. The needed solution is different.

Taxes on tobacco helped push millions of people to butt out; faced with a heavy financial penalty, they had no alternative drug. Diet is vastly more complex -- and it's not clear that a tax on soda would even be that helpful. People, after all, may avoid soda, but consume something in its place (this is the concept of caloric substitution).

Fanciful argument? Actually, researchers at Cornell University did a real-world experiment with taxation and soda: half the households in an upstate New York town faced a 10 per cent tax on soda consumption and the other half didn't. Interestingly the tax discouraged consumption only for the first month and then people went back to their old ways. And, alas, the law of unintended consequences: beer consumption increased for those facing higher soda taxes. The paper was published with the title: "From Coke to Coors."

Others have reached similar conclusions. One study in the Journal of Health Economics found that substitution effects are so complex that poorly targeted food and beverage taxes "could actually increase weight."

Here is an irony of modern times: medicine has never been better but we are increasingly less healthy. We need to take obesity seriously. But in our effort to better our health, we can't be seduced into simple solutions. A tax on sugary beverages sounds compelling. It's also too simplistic to make a difference.

Loading Slideshow...
  • Wendy's Baconator Double

    We're sorry to tell you this, Mr. Mayor, but the cheeseburger called <a href="http://www.thedailybeast.com/galleries/2010/03/24/the-40-deadliest-fast-food-meals.html" target="_hplink">"Deadliest Fast Food Meal"</a> by the Daily Beast, the Baconator Double, packs 1,330 calories in one serving.

  • IHOP's Chicken And Spinach Salad

    Mr. Bloomberg, we apologize for the shock that burger must have caused you. Allow us to soften the blow with a salad. <a href="http://www.dailymail.co.uk/femail/article-2111042/Not-healthy-option--The-IHOP-chicken-spinach-salad-calorie-equivalent-THREE-Big-Macs.html" target="_hplink">IHOP's 1600 calorie Chicken and Spinach Salad</a>. For the record, that calorie count is higher than a burger on their menu with an added <strong>bacon patty</strong>.

  • T.G.I.Friday's Loaded Potato Skins

    We know how you feel, sir. Up is down, down is up, salad is terrible for you... perhaps potato skins have become good for you? Maybe not. <a href="http://www.tgifridays.com/greatfood#appetizers" target="_hplink">T.G.I.Friday's Loaded Potato Skins</a> have 2030 calories and 131g of fat, which, it should be noted, is significantly more than the Jack Daniel's Sampler Platter -- which is a plate of meat, basted with Jack Daniel's and sugar.

  • KFC Double Down

    In case you somehow missed it, Mr. Bloomberg, we'd like to turn your attention to the KFC Double Down. They use fried chicken instead of buns for this sandwich, sir.

  • World's Meatiest Sandwich

    <a href="http://www.geekologie.com/2012/05/28-lb-sandwich-is-worlds-meatiest-most-k.php" target="_hplink">This monstrosity was created</a> to commorate the UK launch of <em>Man vs. Food</em>. Sir, you're probably thinking to yourself, "Who wants to eat a 28 pound sandwich, anyway?" We're not sure, Bloomie, but you'll probably want to ban it.

  • Burger King Triple Whopper With Cheese

    Mr. Mayor, we see your gears turning: just like the proposed ban on large sodas, you're envisioning limiting Burger King customers to only two patties per burger. This<a href="http://www.youtube.com/watch?v=X5vjQQXauD0" target="_hplink"> Japanese commercial for the product</a> may have swayed us your way: you probably shouldn't order anything you have to un-hinge your jaw to eat.

  • Bacon Explosion

    Where will the line be drawn, Mr. Mayor? Will you follow your nose to the doors of those citizens who make themselves a <a href="http://www.nytimes.com/2009/01/28/dining/28bacon.html" target="_hplink">Bacon Explosion</a> and confiscate the contraband? <em>Bacon explosion picture by Flickr user <a href="http://www.flickr.com/photos/beckmann/3362040723/sizes/z/in/photostream/" target="_hplink">Elin B.</a></em>

  • Chili's Shiner Bock Baby Back Ribs

    Michael (can we call you Michael?), by now, we all know <a href="http://www.nytimes.com/2009/09/23/dining/23bloom.html?pagewanted=all" target="_hplink">how much you like salt</a>. But <a href="http://www.chilis.com/" target="_hplink">Chili's Shiner Bock Ribs</a> may be too much even for you: they're packing a whopping 2310 calories, 124g of fat and <strong>6340mg of sodium</strong> in one portion. Please put down the salt-shaker, sir.

  • Denny's Grand Slamwich

    Because we know how focused on health you are, Mr. Mayor, you are likely very focused on starting your day off with a substantial breakfast. Please hang onto your Mayoral hat, because <a href="http://dennys.com/" target="_hplink">Denny's Grand Slamwich</a> is packing 1520 calories and 101 grams of fat. Although there are currently no Denny's locations in New York City, we thought you might want to disapprove anyway. Today NYC, tomorrow the world, am I right? (You remember their <a href="http://www.huffingtonpost.com/2011/09/01/dennys-mac-n-cheese-patty-melt_n_945390.html" target="_hplink">Mac N' Cheese Big Daddy Patty Melt</a>, don't you?)

  • Burger King Bacon Sundae

    Still hungry for dessert? Well sir, Burger King <a href="http://www.huffingtonpost.com/2012/06/12/burger-king-bacon-sundae_n_1590522.html?utm_hp_ref=food" target="_hplink">will be giving their Bacon Sundae a wider release this summer</a>, which means more soft-serve, fudge, caramel and bacon will be available to the public.

  • Cold Stone Creamery's Chocolate Malt

    Here's one you might want to pick up your ban-writing pen for, Mr. Mayor: just one of <a href="http://www.coldstonecreamery.com/" target="_hplink">Cold Stone Creamery's</a> "Gotta Have It"-sized Chocolate Malts contains 1520 calories and 85g of fat. A healthier option might be to just eat a <a href="http://www.fatsecret.com/calories-nutrition/usda/butter?portionid=29481&portionamount=1.000" target="_hplink">stick of butter</a> on its own.

 
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HUFFPOST SUPER USER
maclfam
09:14 PM on 11/21/2012
I dropped soda for flavored seltzer water years ago. 0 calories, local company. But no fast food outlets sell it, few convenience stores, no school cafeterias.
07:07 PM on 11/19/2012
Sorry, you didn't convince me. I think a tax on soda is a good idea, and I think this article was remarkably unpersuasive.
12:53 AM on 11/16/2012
"Soda -- like eating cake or a slice of pizza at lunch -- can be part of a balanced, healthy diet."

Physicians get virtually zero nutritional education. Unfortunately, even if they did, they still might say something as stupid as this. What you need to understand is that there is a very big, powerful and effective sugar lobby that has been successfully shaping institutional and government diet policy in it favour for decades. This article and the one produced for the MEI are most likely a part of that continuing effort. Read Gary Taubes' recent article in Mother Jones to learn how this has been done for profit and to your detriment:

http://www.motherjones.com/environment/2012/10/sugar-industry-lies-campaign
07:52 AM on 11/16/2012
I think this guy is wrong. See my post below. Don't think he's a Big Sugar guy though. He opposes agricultural subsidies.

http://www.huffingtonpost.ca/david-gratzer/canada-obesity_b_1115636.html

And we know Big Sugar loves its government money.
09:41 AM on 11/16/2012
The big sugar disinformation campaign rests on two main points: that you can't blame a single "nutrient" and that sugar can be part of a "healthy diet". Gratzer has embraced these ideas. I generally agree that one shouldn't assume malevolence when incompetence can explain the problem. Perhaps that is the case here.
HUFFPOST SUPER USER
MissTake1989
Equal means equal, hypocrites.
07:08 PM on 11/15/2012
We should just put anyone who drinks soda in prison.

It works so well for drugs.
06:49 PM on 11/15/2012
Good article, doctor. Thoughtful and well argued.

But is the problem the idea of a tax or that the taxes levied tend to be small? Cornell U researchers hit Coke with just a ten percent tax. It didn't work. K. But what if it the tax were 20 percent or 30 percent? I suspect a different outcome.
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HUFFPOST SUPER USER
A ScottMiller
06:49 PM on 11/15/2012
This author needs to do more research, or better explain himself. According to him:

"Tobacco is never good for you. There is no right amount of tobacco; it does nothing but increase the risk of cancer and other diseases. Soda -- like eating cake or a slice of pizza at lunch -- can be part of a balanced, healthy diet."

1) I've read (admittedly very little) about claims that cigarettes do have some positive effects, especially for brain function.

2) I've read (again, admittedly very little) that soda has zero positives; that there is, in fact, no right amount of soda, that it does nothing but increase health risks, etc. I've never heard anyone claim that soda "can be part of a balanced, healthy diet." This seems absurd.

I'm not saying I'm right and he's wrong. I'm just asking for some more information. This article is hardly persuasive as is.
HUFFPOST SUPER USER
notforthesetimes
04:40 PM on 11/15/2012
I believe a bigger problem is that we're raising a generation of kids that lead a completely sedentary existence, perpetually glued to their Game Boys, Wiis, iPhones and iPads.
Communication skills, as well as basic social graces have been replaced by tweeting and texting.
I can envision term papers being delivered in 140 character increments.
Who will we tax then, Apple?
04:06 PM on 11/15/2012
Exclude Soda / highly sugared drinks from food stamps. Problem solved. If it's your own money ... you can buy whatever you want - if it's tax payers money ... we don't need to subsidize unhealthy lifestyles.
03:29 PM on 11/15/2012
Is David Gratzer a paid spokesperson for the soda biz?
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HUFFPOST SUPER USER
Jack Gillespie
03:26 PM on 11/15/2012
Great article - including that Cornell study was genius.
03:19 PM on 11/15/2012
You've Canadianized this story but in Canada it's "pop" not "soda."
03:01 PM on 11/15/2012
This is a terrible set of arguments.
1. It was not the Surgeon Generals warning on Tobacco that decreased smoking, it was increasing the cost of cigarettes via taxes and banning smoking from bars and public spaces.
2. Soda is absolutely NOT part of healthy diet. Unlike pizza or cake soda has NO NUTRITIONAL VALUE besides empty sugar calories that spike and bottom out one's blood sugar.
3. You have seriously cherry picked the science to support your limited and incorrect opinions about the utility of soda taxes to reduce calorie consumption - there are many more studies that show that these proposed taxes will reduce calories consumed.

Its really a disgrace to see a MD who is either vastly ill informed or potentially swayed by industry dollars.
02:49 PM on 11/15/2012
"A tax on sugary beverages sounds compelling. It's also too simplistic to make a difference."

Your argument is too simplistic.
HUFFPOST SUPER USER
Torontosaurous
02:43 PM on 11/15/2012
Pop is not part of a healthy diet!What an irresponsible thing to say!
Unknown amounts of caffeine ,high fructose corn syrup,artificial flavours and colours,artificial sweeteners .Aspartaine alone has 80 side effects,one of which is death.This is in no way to be classified as food.If food is nourishment,then this is the opposite.Processing pop uses more energy then it gives.Here is a clear and simple demonstration; Have a friend hold out their arm straight out to their side.As you push down on the top of their hand,they should try and resist- note level of strength.Next,have them take a couple of gulps of coke,wait 10 seconds and try the strength test again.In my opinion,these products should come with warning labels.
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HUFFPOST SUPER USER
Timothy Thocher
my doG looked in the mirror and saw God
02:37 PM on 11/15/2012
We are asking the wrong questions in regards to soda and obesity. It is not soda, but some of the ingredients in soda that lend themselves to the body's ability to store fat. The manipulated sugars, found in most soda is harmful, and disrupts the your body's normal processes at the cellular level. If we went back to producing soda with natural sugars, two healthy things would happen, first the body metabolises natural sugar differently than manipulated sugars. second, the price would go up naturally lowering the consumption. Of course the biggest problem is, all of our foods have artificial and manipulated ingredients. Simply eliminating these from your daily diet, will have a positive effect on your body fat content.