Would you drink less soda if it cost a little more? Lawmakers believe that a tax on sugary carbonated beverages can go a long way toward combating America’s obesity epidemic. The idea, which President Obama says is worth considering, is gaining serious traction across the country. There’s just one problem: it won’t work.
If implemented as currently discussed, a soda tax of about one cent per ounce would be collected on most sugary carbonated drinks—but not on diet (artificially sweetened) beverages. It would also apply to energy drinks, sports beverages, and juices. A two-liter of Coca-Cola, which will retail for around $1.50-$2.00 depending where you shop, contains 67.6 fluid ounces. As proposed, the sugary soda tax would then bump the price up an additional 68 cents, which is roughly a 35-50% jump in out-of-pocket expense. That’s nothing to sneeze at, but no, it still won’t work.
Allow me to qualify that claim. In its strictest sense, a soda tax alone will not have a substantial impact on obesity rates in America.
The theory promulgated by soda tax supporters is that a price increase will lower demand and consumption of sugary drinks. Their assumption is supported by some research which indicates an 8-10% drop in demand for every 10% increase in price; taken in context, this would mean a decline of 25-50% nationwide in sugar-laden beverages. That sounds like it could put a dent in the average American’s waistline.
Obesity has two principle causes: overeating and lack of exercise. Obviously, a soda tax will not directly impact daily activity levels, so the question simply becomes how it will affect overeating.
Humans are biologically driven to eat fat, salt, and sugar. No, we don’t gorge on those compounds out of troughs, but when manufactured right they are the reason we plow through restaurant sandwiches and can’t stop at one potato chip. Today, processed foods are everywhere and they are engineered precisely in a way that generates a physiologically rewarding response. They overwhelm our sensory experience and almost literally rewire our brains. Sure, we can raise the price on sugary drinks but that alone is not going to change overeating behavior.
Another presumption behind the soda tax is that consumers will shift buying habits toward sugar-less drinks. It’s hard to dispute the likelihood of that change, but it’s also not difficult to imagine the rationalizing experience people will have as they consider other purchases. If you’re buying “healthy” sugar-free soda, why not reward yourself with some other form of sugary junk? We’ll get the Diet Pepsi because it’s cheaper but let’s use the savings to pick up a frozen cheesecake. These scenarios will play out in consumer heads exactly as described, and advertisers of processed food will make sure of it.
To be fair, only one angle of the soda tax proposal has been considered: the thought that increased soda prices alone will have some significant impact on obesity. Money raised by a soda tax will create a major revenue source, about $15 billion in its first year, which can then be re-purposed to fund healthy initiatives (though most will go to a general healthcare fund).
If you read this article and come under the impression that its author opposes a tax on soda, you’d be wrong. Government action on obesity and Western disease is long overdue and even if it doesn’t work as intended it’s still a step in the right direction. America needs to begin forging a food culture that promotes the eating of healthy, real food and discourages the consumption of artificial and processed junk.
Taxation of sugary soda is only one piece of a multi-faceted jigsaw puzzle toward making this country’s citizenry healthy again. We know what the piece looks like but we’re not sure yet how exactly it fits in with the others. When it’s all said and done though, its role will be obvious.