Menus Subscribe Search

Follow us


Don’t Tax Soda, Tax Sweeteners

• December 08, 2011 • 12:08 PM

Efforts to slow obesity by taxing sodas hit the wrong target, argue three economists who propose a better-aimed tax on sugar and syrup that even they admit still sidesteps the real problem.

Public-health officials and policymakers across the United States have been talking a lot lately about tackling the epidemic of obesity through smaller nudges like a per-ounce tax on soda. Not surprisingly, as enthusiasm for this idea expands, so too has soda-tax scholarship.

“Our take on this was basically that everybody is talking about a soda tax, so we stepped back and said, ‘Wait a minute, this is not very well targeted,’” said John Beghin, an economist at Iowa State University. “If you want to impose a tax and reduce calorie intake from sweeteners, there is a better way to do it.”

He and colleagues Helen Jensen and Zhen Miao propose a more inventive solution in a new paper published in the journal Contemporary Economic Policy. Instead of sticking a fat tax on soda, they suggest a more effective policy would tax food producers on the corn syrup, sugar and other sweeteners they stick into products long before consumers get to them at the grocery store.

[class name=”dont_print_this”]

Idea Lobby

THE IDEA LOBBY
Miller-McCune's Washington correspondent Emily Badger follows the ideas informing, explaining and influencing government, from the local think tank circuit to academic research that shapes D.C. policy from afar.

[/class]

The authors are quick to stress that this isn’t the policy cure-all for obesity (or even the best way to curb it). But if politicians are determined to create some kind of fat tax, this would be the way to do it.

Such a tax would incentivize producers, rather than consumers, to change their behavior, and it would move the policy solution closer to the actual problem. Economists talk about this as the targeting principle — the idea that policy instruments should cut as close to the source of the trouble as possible.

In this case, if we want to target the unhealthy sweeteners in food and drinks, we’d do better to tax those ingredients directly rather than the entire can of soda. The researchers’ model suggests that, relative to a tax on unhealthy foods, a direct sweetener tax on producers would impact consumers less while also getting a much greater calorie-reduction bang for the buck.

As manufacturers are forced to pay more for ingredients like sugar or high-fructose corn syrup, that cost would still be passed on to the consumer. But it would look a lot smaller on your grocery bill than a soda tax. That’s because sweeteners taste like the main ingredient in Coke or Little Debbie snack cakes, but they actually make up a fairly small percent of everything that goes into these foods (including labor, packaging and transportation). Even doubling the cost of corn syrup through a tax would only raise the price on the shelf of these products by a few cents.

To get the calorie reduction impact of a one-cent-per-ounce soda tax, the researchers project that we’d need a nearly 49 percent tax on the caloric sweeteners that go into it. But such a tax would only cost most of us at the grocery store about an extra $6 of lost purchase power per year.

“The idea is not to decrease food consumption, the idea is to decrease the sweetener consumption,” Beghin said. “That’s why the second scenario, using input taxes, is more effective. Consumers are not penalized; they don’t have to decrease their consumption so much. Instead of hitting them on the head with a hefty sales tax, like on a sweetened product like chocolate, you basically can affect the sugar intensity, the sweetener intensity at the producer level.”

The tax is still regressive, in that it has a heftier impact on low-income people who devote a larger share of their household expenditures to food (this is a common objection to soda taxes we’ve explained before). But the effect is much smaller.

In their model, the researchers did not tax substitute sweeteners like honey that are perceived as healthier. It’s possible such a tax would prod producers to shift, on a large scale, to these types of substitutes.

“You can certainly see evidence of that historically,” Jensen said. Manufacturers, shifted to high-fructose corn syrup in the early 1980s because tariff policy sent the price of sugar up. And in some cases, producers have even migrated to more sweeteners in products to compensate for reducing fat that now must be included on nutrition labels.

In the case of corn syrup, all of this might sound like sticking a tax on something we already subsidize. But Beghin says corn prices have gone up so much over the last decade — in part thanks to the rise of biofuels — that corn subsidies are no longer that significant. If we removed corn subsidies, that would have the effect of cutting back on only one-half of 1 percent of the sweeteners people consume (compared to the 10 percent reduction the researchers forecast with their tax).

There is, however, a much larger picture here: The real problem isn’t sweetener consumption, it’s obesity.

“Following the same idea of the targeting principle, if obesity is the problem, you should target obesity,” Beghin said. “And one way to do it would be provide incentives for better health behavior, or penalties for bad health behavior.”

Food taxes — even smart ones — don’t exactly do that.

“But very often,” Beghin said, “you have limitations on what you can do with health policy.”

Emily Badger
Emily Badger is a freelance writer living in the Washington, D.C. area who has contributed to The New York Times, International Herald Tribune and The Christian Science Monitor. She previously covered college sports for the Orlando Sentinel and lived and reported in France.

More From Emily Badger

A weekly roundup of the best of Pacific Standard and PSmag.com, delivered straight to your inbox.

Recent Posts

December 19 • 4:00 PM

How a Drug Policy Reform Organization Thinks of the Children

This valuable, newly updated resource for parents is based in the real world.


December 19 • 2:00 PM

Where Did the Ouija Board Come From?

It wasn’t just a toy.


December 19 • 12:00 PM

Social Scientists Can Do More to Eradicate Racial Oppression

Using our knowledge of social systems, all social scientists—black or white, race scholar or not—have an opportunity to challenge white privilege.


December 19 • 10:17 AM

How Scientists Contribute to Bad Science Reporting

By not taking university press officers and research press releases seriously, scientists are often complicit in the media falsehoods they so often deride.


December 19 • 10:00 AM

Pentecostalism in West Africa: A Boon or Barrier to Disease?

How has Ghana stayed Ebola-free despite being at high risk for infection? A look at their American-style Pentecostalism, a religion that threatens to do more harm than good.


December 19 • 8:00 AM

Don’t Text and Drive—Especially If You’re Old

A new study shows that texting while driving becomes even more dangerous with age.


December 19 • 6:12 AM

All That ‘Call of Duty’ With Your Friends Has Not Made You a More Violent Person

But all that solo Call of Duty has.


December 19 • 4:00 AM

Food for Thought: WIC Works

New research finds participation in the federal WIC program, which subsidizes healthy foods for young children, is linked with stronger cognitive development and higher test scores.


December 18 • 4:00 PM

How I Navigated Life as a Newly Sober Mom

Saying “no” to my kids was harder than saying “no” to alcohol. But for their sake and mine, I had to learn to put myself first sometimes.


December 18 • 2:00 PM

Women in Apocalyptic Fiction Shaving Their Armpits

Because our interest in realism apparently only goes so far.


December 18 • 12:00 PM

The Paradox of Choice, 10 Years Later

Paul Hiebert talks to psychologist Barry Schwartz about how modern trends—social media, FOMO, customer review sites—fit in with arguments he made a decade ago in his highly influential book, The Paradox of Choice: Why More Is Less.


December 18 • 10:00 AM

What It’s Like to Spend a Few Hours in the Church of Scientology

Wrestling with thetans, attempting to unlock a memory bank, and a personality test seemingly aimed at people with depression. This is Scientology’s “dissemination drill” for potential new members.


December 18 • 8:00 AM

Gendering #BlackLivesMatter: A Feminist Perspective

Black men are stereotyped as violent, while black women are rendered invisible. Here’s why the gendering of black lives matters.


December 18 • 7:06 AM

Apparently You Can Bring Your Religion to Work

New research says offices that encourage talk of religion actually make for happier workplaces.


December 18 • 6:00 AM

The Very Weak and Complicated Links Between Mental Illness and Gun Violence

Vanderbilt University’s Jonathan Metzl and Kenneth MacLeish address our anxieties and correct our assumptions.


December 18 • 4:00 AM

Should Movies Be Rated RD for Reckless Driving?

A new study finds a link between watching films featuring reckless driving and engaging in similar behavior years later.


December 17 • 4:00 PM

How to Run a Drug Dealing Network in Prison

People tend not to hear about the prison drug dealing operations that succeed. Substance.com asks a veteran of the game to explain his system.


December 17 • 2:00 PM

Gender Segregation of Toys Is on the Rise

Charting the use of “toys for boys” and “toys for girls” in American English.


December 17 • 12:41 PM

Why the College Football Playoff Is Terrible But Better Than Before

The sample size is still embarrassingly small, but at least there’s less room for the availability cascade.


December 17 • 11:06 AM

Canadian Kids Have a Serious Smoking Problem

Bootleg cigarette sales could be leading Canadian teens to more serious drugs, a recent study finds.


December 17 • 10:37 AM

A Public Lynching in Sproul Plaza

When photographs of lynching victims showed up on a hallowed site of democracy in action, a provocation was issued—but to whom, by whom, and why?


December 17 • 8:00 AM

What Was the Job?

This was the year the job broke, the year we accepted a re-interpretation of its fundamental bargain and bought in to the push to get us to all work for ourselves rather than each other.


December 17 • 6:00 AM

White Kids Will Be Kids

Even the “good” kids—bound for college, upwardly mobile—sometimes break the law. The difference? They don’t have much to fear. A professor of race and social movements reflects on her teenage years and faces some uncomfortable realities.



December 16 • 4:00 PM

How Fear of Occupy Wall Street Undermined the Red Cross’ Sandy Relief Effort

Red Cross responders say there was a ban on working with the widely praised Occupy Sandy relief group because it was seen as politically unpalatable.


Follow us


Don’t Text and Drive—Especially If You’re Old

A new study shows that texting while driving becomes even more dangerous with age.

Apparently You Can Bring Your Religion to Work

New research says offices that encourage talk of religion actually make for happier workplaces.

Canadian Kids Have a Serious Smoking Problem

Bootleg cigarette sales could be leading Canadian teens to more serious drugs, a recent study finds.

The Hidden Psychology of the Home Ref

That old myth of home field bias isn’t a myth at all; it’s a statistical fact.

The Big One

One in two United States senators and two in five House members who left office between 1998 and 2004 became lobbyists. November/December 2014

Copyright © 2014 by Pacific Standard and The Miller-McCune Center for Research, Media, and Public Policy. All Rights Reserved.