December 24, 2008

A new sin tax

To begin: "A study by the Centre for Science in the Public Interest showed that soft drinks were the single biggest contributor to calories in the American diet [...]"

That's right, soda beat out meat, starches, grains, fruits, and vegetables; it beat candy, cookies, and cakes. That quotation makes me feel uncomfortable drinking a soda, even if I am able to ignore the various environmental reasons for avoiding the drinks (e.g. creation of plastic bottles and draining of aquifers near bottling plants, particularly in impoverished areas in other countries (e.g. India)).

Now it seems as if Gov. Patterson is trying to change this frustrating/disgusting consumption pattern. Under Patterson's new budget plan for 2009, "[...] consumers will have to pay an 18% tax on non-diet sodas and sugary drinks." Obviously this faces resistance from drink companies and the American Beverage Association, but I am all for this policy. Sin taxes are (or at least should be) designed to discourage behavior that has a demonstrable negative effect on the person or a negative spillover effect on the community as a whole (e.g. soda leads to obesity which raises all health care costs). I think that taxing what largely amounts to a luxury good as a manner of both improving the overall level of health in the community and as a budget deficit filler is a fantastic idea. I would love to see the price of soda skyrocket to the point where it becomes as unappealing to consumers as its lasting effects are to those who actually study these effects.

Also, I have no qualms about the fact that this policy is regressive. Poverty is highly correlated with (and sometimes causally linked to) obesity, which is also causally related to soda consumption. At this point soda needs to be made a less appealing option so that money spent on calories is directed at the (slightly) healthier available alternatives as economic pressures force people to buy cheaper foods. I know that the healthy foods are the expensive foods, so it is all the more important that we push people toward the healthier end of their available consumption spectrum as their available spectrum shifts to a lower dollar level. We can take this recession and use it as a tool to shift preferences so that they take into account the true cost of the decision to drink soda. Basically, if we can get poor people to make healthy decisions we will be taking a lot of the burden off our health care system, which helps everyone and will hopefully create a positive-feedback loop that leads to lower levels of poverty (as, say, total time out of work due to poor medical treatment declines).

In the end I am actually also just happy to have another, better excuse to quit drinking soda. I hope that was coherent; I am very cold and it is pretty early.

4 comments:

  1. Wow. Just wow. That sentence really grabbed me. I am utterly disgusted.

    Not that there's any way to easily get this message to everyone, but I personally wish I'd known earlier that once you cut soda out of your diet, it is really easy to keep it out (at least for me). Ever since soda become an at-most twice-weekly habit for me, the temptation to return to my twice-daily habit has just never been there. And with different numbers, of course, I've had the same experience with fast food. Not to mention that Pollan fellow really decreased my appetite for it. Now if only I could kick my terrible and very recently developed Starbuck's habit, and get my beer consumption down to a proper level (so I still drink unhealthy drinks, just not with so much sugar).

    I also like sin taxes, though I think they should be limited to economic sins and not applied to moral sins. But it sounds like you guys are getting all kinds of fun new taxes up there in NY. Of course, you'll have a functioning government, so it's not a terrible tradeoff. Our budget appears to be OK in Missouri because the current governor just cut everything. Like, really a whole lot.

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  2. And discussing this with a coworker raised another issue which I was thinking about before but didn't get down: why give diet soda a pass?

    I don't have either study, but I've read a study that shows that people who drink diet sodas routinely use that to justify other unhealthy dietary decisions (so even if diet soda is healthier when all else is equal, in this case, all else cannot be equal). And my coworker cited a study wherein it was shown that diet soda does not satisfy the brain's craving for sweets (quite literally, it doesn't hit the spot), which presumably leads to the decisions mentioned in my study.

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  3. I don't think I like sin taxes. I'm too sick (bronchitis blaaarg) and out of it to make a coherant argument, really, but isn't it slippery slope? If we're taxing soda more than milk, it seems like a short hop to tax romance novels more than Shakespeare, or even a vegetable with less nutritional value (um...celery?) more than, say, spinach. I don't want to sacrifice my freedom to make consumer choices based on the fact that some people are idiots and make bad ones. Yes, those people degrade the health of society as a whole, probably wind up draining more public resources, etc., but I really think that we should (somehow) be educating them about how to make better decisions, rather than making them for them.

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  4. I agree with you, which is what my "economic sin tax but not moral sin tax" thing was all about.

    I'm OK taxing stuff that makes people really fat, because fat people increase the health care costs that I have to pay. Same thing with cigarettes. Consumption of alcohol also results in (quantifiable and monetary) externalities on society.

    So when romance novels and celery start having direct and quantifiable costs on other members of society, you can taxes those too. But until then, there's no rationale.

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