There's More Proof That Soda Taxes Work

Basic rule of economics appears to be driving down sugary-drink consumption in Mexico.
(Photo: Flickr)
Oct 13, 2015· 2 MIN READ
Jason Best is a regular contributor to TakePart who has worked for Gourmet and the Natural Resources Defense Council.

We now seem to have an answer to the hotly debated question of whether slapping a tax on soda works to curb consumption—but don’t expect the beverage industry to give up its antitax crusading anytime soon.

For years, public health advocates working to fight America’s obesity crisis have argued that we should use one of the most basic principles of economics to drive down consumption of one of the most ubiquitous sources of empty calories. That is, raise the price of sugary drinks, via a tax, so consumers will buy less of them.

Now, there’s evidence to suggest taxing soda on a significant scale does lead to people drinking less of the sweet stuff.

Researchers from the Food Research Program at the University of North Carolina and the National Institute of Public Health of Mexico teamed up to take a closer look at the impact of Mexico’s landmark tax on sugary drinks, which the country passed in 2013. Notably, the peso-per-liter tax appears to have led to an average 6 percent decline in soda sales, The New York Times reported, a drop that appears to be accelerating. Soda sales for December 2014, the most recent statistics available to the research team, were down by 12 percent compared with December 2013.

As promising as those numbers are, they’re hardly a surprise. “It’s exactly what we thought the tax would do,” UNC nutrition professor Barry Popkin, who led the research team, told the Times. And the results aren’t likely to squelch the soda tax debate anytime soon.

After all, even as ardent an opponent to taxing sugary drinks as the American Beverage Association doesn’t bother to argue that taxing soda won’t reduce consumption—although it has put out a number of seemingly absurd arguments during its long, tooth-and-nail fight against such taxes.

One such specious tactic has the ABA decrying soda taxes as unfair: “[W]hy not a tax on doughnuts, cakes, cookies, tax the heck out of Mrs. Fields!,” the association complained on its website earlier this year, quoting one sympathetic antitax advocate. That ignores the profound differences in the way most people consume soda versus other sugary treats: It may be unusual to see someone nursing an entire box of doughnuts at his desk all day but not so much when it comes to one of those monster-size Big Gulps. And when was the last time you got a "free refill" on cookies at Mrs. Fields?

What the most recent study on the effects of Mexico’s soda tax isn’t able to answer, however, is whether the drop in soda consumption is having any impact on the rate of obesity and related diseases. Although it’s simply too soon to attempt to measure the health effects of the tax, if any, you can bet the beverage industry will attempt to conflate the absence of evidence with an evidence of absence in support of its rallying cry, “We can’t tax our way to better health.”

Whether that’s true in relation to soda remains to be seen, but as the Times pointed out, we have arguably taxed our way to better health before and in a way that's had an outsize impact on a younger generation. “The idea for the soda tax is in some ways modeled on the tobacco taxes passed by states and the federal government over the last few decades. The idea of those taxes was not only to raise revenue—though that was a nice side effect—but also to discourage people from buying cigarettes,” according to the Times. “A robust literature now exists showing that the resulting higher prices really did push down cigarette sales, particularly among young people.”