Soda Taxes

Are Facts Turning the Tide Against Soda Taxes?

New data out of Mexico pour cold water over heated rhetoric.

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Soda
Credit: eddie.welker / photo on flickr

Soda taxes, which are uniformly awful, have made national and international headlines in recent weeks.

Despite a ballyhooed soda tax, it seems soda sales are rebounding in Mexico. Soda tax supporters appear flummoxed, but undaunted. Their argument: it was hot. Really. Since 2015 was warmer than 2014, tax supporters argue, that can help explain the increase in soda consumption in Mexico.

Earlier this year, I discussed data that suggested Mexico's soda tax had reduced consumption by roughly 10 percent.

Tax proponents seized on this data. Bloomberg News—headed by former New York City mayor Michael Bloomberg, without question the world's leading advocate for soda taxes—published an editorial cheering Mexico's soda tax.

(If the editorial reads just like a canned Michael Bloomberg speech, it's worth noting that the Bloomberg View editorial board includes among its members Mayor Bloomberg's former mayoral speechwriter.)

"One of the world's highest soda taxes appears to be working," the editors wrote. And then they dropped the other shoe. "Other governments—including in the U.S.—should be encouraged to impose similar taxes and take other strong actions to curb soda drinking."

Unfortunately, with funding from Michael Bloomberg—who also bankrolled the efforts to adopt taxes in Mexico and Berkeley, California—some American cities are considering their own soda taxes. Oakland voters will decide in November whether to tax soda sales in the city.

But it's Philadelphia's proposed tax that's generating the most headlines. Mayor Jim Kenney has proposed a three-cents-per-ounce soda tax as a way to pay for his promised universal pre-K.

Democratic presidential candidates Bernie Sanders and Hillary Clinton sparred over the issue, with Clinton hailing Philadelphia's proposed tax and Sanders rightly panning it as regressive (just one of the many flaws inherent in such taxes).

A new study by Harvard School of Public Health researchers, released last week, is being used to bolster prospects for Philadelphia's tax. Study co-author Steven Gortmaker calls Philadelphia's proposed tax "just a total winner of a policy from a public health perspective."

But the news out of Mexico is not good for tax supporters in Philadelphia and elsewhere. A policy that was being hailed as a total winner just a week ago now looks about as promising as a Sam Hinkie rebuild.

City councilors appear anywhere from quietly opposed to openly hostile to the mayor's proposal. This week, the Philadelphia City Council indicated it might reject a soda tax—or pass one far smaller than what the mayor had sought.

While cities consider soda taxes, it's worth asking whether the new data out of Mexico mean the country's soda tax—a model for any U.S. tax—is a bust.

Economist Tyler Cowen is unwilling to call the country's soda tax experiment a failure, arguing that "it can take a very long time to discover whether or not policies are working well."

But I'm willing to go there right now.

If the ultimate purpose of Mexico's soda tax were simply to reduce soda consumption, then I might be willing to entertain the notion that the jury's still out. But the purpose of soda taxes, as I've written time and again, is not to make soda more expensive or to reduce soda consumption. The ultimately purpose of soda taxes—the only relevant policy—is to combat obesity and other health problems.

There's no evidence to date showing soda taxes can or will reduce rates of obesity or diabetes. There is a large and growing arsenal of facts, though, that show soda taxes don't work.

Complicating matters is the fact there's also a significant army of public health activists who tell us facts just don't matter in the debate over soda taxes. But facts do matter. And opponents of soda taxes have no better weapon than to constantly repeat and amplify those facts.

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  1. If the ultimate purpose of Mexico’s soda tax were simply to reduce soda consumption, then I might be willing to entertain the notion that the jury’s still out. But the purpose of soda taxes, as I’ve written time and again, is not to make soda more expensive or to reduce soda consumption. The ultimately purpose of soda taxes?the only relevant policy?is to combat obesity and other health problems.

    No, the ultimately purpose of soda taxes (and all taxes) is to hoover up more money for politicians to spend on their latest bid to earn reelection.

    1. Yeah, I’ve always liked Baylen but that “the ultimately purpose of soda taxes?the only relevant policy?is to combat obesity and other health problems” makes me think maybe he suffered a traumatic brain injury. No, it’s ultimate purpose is the same as every other government initiative – exercise of power and money. Oh, sure, it may be true that a few people involved with first developing any idea are truly concerned about addresssing a particular problem, but the only way the idea gets far enough to be broadly supported is by making it in the politicians and bureaucrats best interests to support the idea and their best interests always seem to involve power and money.

      Of course, when you tax sugary drinks to discourage consumption and consumption isn’t discouraged, you know what that means – the tax wasn’t high enough and sugar is even more dangerouly addictive than we thought so even sterner measures must be taken. More money from the higher taxes and more exercise of power through the sterner measures. I think we have a sure-fire winning idea here.

      1. makes me think maybe he suffered a traumatic brain injury

        Too much soda probably.

        1. Or not enough?

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  2. They want the money and the control. They give zero fucks about effectiveness.

  3. Mayor Jim Kenney has proposed a three-cents-per-ounce soda tax as a way to pay for his promised universal pre-K.

    They’re going to need some fat kids to pay for pre-K.

    1. J. Cristo… 3 cents/ounce is 36 cents per can of coke. That basically doubles the price per can.

      1. Why do you hate pre-school children?

        1. Why do you hate freedom?

          1. Why do you hate satire?

  4. The obvious answer is that the taxes aren’t high enough yet. If it isn’t working, the solution is to govern harder, faster, and more.

    1. This. It’s so obvious.

      1. Who are you, who are so wise in the ways of science?

    2. Even if the tax is high enough to make people buy less soda, that will reduce revenue, so they’ll still have to raise taxes to pay for universal pre-K. Because Philadelphia so desperately needs universal pre-K!!

      1. And I’m sure the universal day-care lock-box won’t be raided for other things.

      2. Woodrow. Not exactly. If tax now is zero, any future tax revenue will be more than it is now unless soda consumption drops to zero.

        1. The proposed tax is X with the knowledge that they need to pay for Boondoggle Y and the public drinks Z ounces of cola per year. If they fail to gain enough revenue for pay for Y because Z drops as a result of X, X will have to go up.

      3. I’m surprised no one has cared to examine the case of Quebec where ‘universal’ or ‘subsidized’ care is concerned. There’s 20 years of evidence. Basically, it’s slowly reverting back to what it was pre-1995 because the costs are no longer justified.

        1. When are your fellow Canucks going to finally cut off Quebec from the rest of Canyada and set you adrift in the ocean? They’re not your fwend, buddy.

          1. I’m looking to leave.

            They’re constant haranguing of English has reached its absurd apex.

            But they want my tax money though.

        2. Proponents don’t care. They just want free shit and/or short term gain.

  5. Oakland voters will decide in November whether to tax soda sales in the city.

    That’s nice. Here in NYC we let our betters create New Man for us. I’m sure the soda tax, when it comes, will be no different.

    1. Ah, c’mon now – it says right in the headline and the article that the city council didn’t institute any new tax, it was a fee. Not a tax, a fee. That makes all the difference in the world as to whether or not you need to get the voters and the tax-payers involved in the decision-making process. Fees don’t affect the tax-payers, only taxes affect the tax-payers. It’s how things work now. If the City of Oakland wants a soda tax they have to consult the tax-payers, if the City of Oakland decides to impose an environmental impact fee on certain businesses and industries and the environmental impact is fat unhealthy kids and the businesses and industries happen to be the makers and sellers of soft drinks, well, that’s the way the process works.

      If the EPA wants a new rule, they have to give notice and hold hearings and allow public debate. If the EPA merely re-interprets an existing rule in such a way that it accomplishes a goal in the same way as a new rule, they don’t have to follow the notice-and-comment rules. Which way do you suppose is easier for the EPA to achieve its goals?

      1. …now my stomach hurts…

        1. Well, crap, I’m sorry you’re feeling bad Almanian – but we’re all pulling for you and hoping things get better. Hang in there, man.

          Almanian/SMOD 2016!

          /Fuck cancer

          1. Fuck cancer to death.

      2. Yes, the fact that this is in fact a huge giveaway to Big Supermarket* makes me feel a lot better.

        *The bag tax is five cents for a plastic bag that costs them maybe one tenth of one cent to provide.

        1. That tax goes to the government, not the store.

          1. In NYC the tax fee will go to the store.

          2. In San Francisco, the tax weird subsidy goes to the store.

        2. In CA some stores have gotten around the bag ban by printing the word reusable on it.

  6. …a three-cents-per-ounce soda tax as a way to pay for his promised universal pre-K.

    That is going to make universal pre-K dependent on a whole lot of soda sales. Which seems to defeat the stated goal of reducing soda consumption.

    1. Oh hush. That’ll be willed into not happening . Hey look over there!

    2. We can’t have people quit smoking! Think what will happen to our revenues, man! How will we pay our government workers? Their children will starve.

      SMOKE FOR JOBS AND THE CHILDREN!

  7. looks about as promising as a Sam Hinkie rebuild

    “Trust the process!” “We’ve got draft picks!”

    *weeps*

  8. The headline seems to (falsely) imply that any “facts” ever supported soda taxes.

  9. I’m afraid Bloomberg is not going to let it go. He has that deranged look in his eyes all people obsessed with faulty premises and irrational ideals have. See anyone who clings to the cult of climate change.

    1. Our climate is finally changing down here in Michirust. The spring is really slow this year, so none of that “30 below zero, 20 feet of snow….and tomorrow through next month will be 80.” 50’s….60’s…..70’s….everyone’s lawn just looks gorgeous.

      Looks like the rain will hold off today for granddaughter #1’s 2nd Birfday party, so WOO HOO! Thanks for the nice weather, Mother Nature….you bitch.

  10. I have it on good authority that soda fuels the drug war, which fuels terrorism. If you drink soda, you are essentially a member of Al Qaeda. Look it up!

    1. Because we send the tax revenue to “rebels”?

  11. Whether it “works” or not the more important point is that it is immoral to use the tax code to punish people who aren’t living their lives in conformance with your perfect vision of utopia. Libertarians need to point this out more often rather than spending most of our time fighting in the trenches of policy papers and economic studies. If you want to persuade people on the philosophy behind libertarianism it might be a good idea to not sound like an Ezra Klein article on Vox. It isn’t just about what is practical it is also about right and wrong.

    1. Look at this guy, bringing up the morality & ethics of taxation. And then telling us how we ought to persuade others about Libertarianism.

      1. Thanks for a one sentence pseudo summary of my point. I sense your comment was intended as a criticism but somehow you failed to make a point. Perhaps add a sentence?

        1. Oh, I wasn’t being serious?your point was actually fine.

          As for an actual constructive remark on what you said:

          Most statists (i.e., non-Libertarians) will possess some hazy idea about ‘social contract’ and would likely opine that such taxes are perfectly moral as a condition of living in a ‘modern democratic society’ or some such. And that if someone really dislikes a given tax enough, then they should simply engage in the political process to potentially have it lifted and help create a system more representative of their interests. See, everybody can win when we all work together!

          How do you respond?

          1. In that case sorry for the cranky response. At the risk of writing a book let me explain my thinking on a couple points.

            First the point you make about a “modern democratic society” has been drummed into people’s heads by progressives for 100 years. I think we have to challenge the basic assumption that things should be decided democratically. Most things are not your neighbors business. We shouldn’t be ceding the point that it isn’t OK for your neighbor to walk in your living room uninvited and start rearranging the furniture but its OK as long as he votes to do it.

            1. Second as far as the tax issue I think we should gloss over points on welfare, taxes, and transfer payments if we are taking a long view. Obviously views on these items are entrenched and arguing against food stamps for example makes you look cold to a meaningful percentage of the population. Looking at the very long game I think the need for various welfare programs will eventually go away. We are rapidly approaching a point where we will be able to produce so much with so little labor that welfare as a need will eventually go away anyway. To get there we need the economy to grow and innovation to lead that growth. What currently stands in the way of that is various aspects of the regulatory/nanny state.

              We can make compelling arguments on things like asset forfeiture, and regulations on hair dressers, FDA meddling etc without fundamentally having to convert people’s world view. My theory is we focus on changing people’s mind on regulations, and other government interference to improve our overall economic well being, wait until our economy hits critical mass and then the welfare state dies on its own for lack of need. At that point the regulatory nanny state has been gutted and the welfare state has died a natural death.

              This is the very long game as in not in our life times.

              1. You’re not wrong, just probably addressing this too much on a logical/intellectual level where most humans don’t make decisions on?particularly those concerning politics & society.

                A basic problem is that Libertarians tend to only be adept at talking about Libertarianism in the abstract. We use a lot of conceptual terms like social contract, opportunity cost, innovation, asset forfeiture, welfare state, etc. Because we’ve been thinking about this shit in our heads and amongst each other for years already.

                Unfortunately, this likely comes off as empty jargon to anyone not already initiated in the subject/familiar with the dialect.

    2. Sure, but just try to get the local newsrag to print your letter to the editor saying just this. If pre-K is the universal boon it is supposed to be, “benefiting us all as the children get more education,” then shouldn’t they be advocating everyone pay for it? Why just the heavy soda consumers? How about a $5 tax on drinks at the local chi-chi watering hole, $10 per steak at the expense account restaurants, $15 on opera tickets? Tell the hipsters they are going to pay too and see how fast these sin taxes will disappear.

      1. Sure but then you have to re-fight the battle on every issue plus what happens when there is an issue that violates basic rights but is good for 55% of the population? Obviously not every policy is bad for everyone and some are appealing to a majority of the population (see marijuana prohibition circa 1985). I am not saying ignore practical arguments but the moral argument should always be made right along side of them and have at least equal prominence.

      2. If pre-K is the universal boon it is supposed to be, “benefiting us all as the children get more education,” then shouldn’t they be advocating everyone pay for it?

        Already done in NYC.

        1. With the caveat, of course, that less than half of us are actually paying anything at all.

          1. Therein lies one of the problems. What does your cost/benefit analysis for a government program look like when your personal cost is always zero?

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  13. THCV to reduce obesity.

  14. I just want to say fuck bike paths.

    Paths built for the inconsiderate.

    Thank you.

    1. They do seem to attract brightly-colored pests.

      1. Walkers/pedestrians/novice joggers who are the worst. Not me of course.

        And don’t get me going about mothers and their strollers.

        1. LOL like most drivers are so considerate.

        2. And don’t get me going about mothers and their strollers.

          Gonna disagree, my friend. Cute young moms are one of the joys of summer.

          1. Not when they stop in the middle of a bike path to fix up their baby!

            1. Doesn’t mean *you* have to stop.

              p=m * v

              get that v up – pedal harder.

    2. *standing ovation*

      1. Or…

        Get the fuck out of the way, dickhead!

  15. Soda smuggling will be encouraged.

  16. The purpose of the soda tax is to distract attention from the corn subsidies (for HFCS) that make it too-cheap in the first place.

    1. Well that and our war on cane sugar.

    2. The corn subsidies make *HFCS* ‘too cheap’ (ie cheaper than cane sugar) – but sugar is already cheap.

      Get rid of the subsidies and soda prices don’t go up, the industry switches to sucrose sources and we enrichen a whole bunch of third world farmers while the Iowans get to go pound sand.

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  19. I think the goal is clear. They want kids to drink more beer.

    1. Beer for babies!
      Baby beer!

  20. Despite a ballyhooed soda tax, it seems soda sales are rebounding in Mexico.

    *Anti-obesity activists* might be flummoxed – but the Mexican government (and governments all over the world) are rejoicing at this news.

    It means they can afford to let their moralizing flags fly without having to worry that these sorts of regulations will cut income to the exchequer.

    They can *be seen to be* righteous while still maintaining tax income. Let a million regulations bloom.

  21. Can there be a more regressive tax? This is worse than the lottery.

  22. admittedly I lost interest and started skimming the article about a paragraph in, but what on earth does he mean by the taxes are working? Is he admitting it’s really just about the money?

  23. The eternal battle cry of the left, “Don’t confuse the issue with mere facts.’

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  25. There’s no evidence to date showing soda taxes can or will reduce rates of obesity or diabetes.

    This is one thing I hate in discussions about medicine. Complete lies about the evidence available.

    Consider what a massive claim this is. Not just that *he* hasn’t seen any such evidence, not just that *no one* ever in the history of the universe has, but that *no* such evidence has ever existed, perceived or not.

    “There is not a single fact of reality that makes it more likely that soda taxes can (which is simply a capability in some *possible* context!)

    It reminds me of Bill Clinton’s claim to “feel our pain”. Really? You feel the pain of 300million people? What incredible delusions of godhood he must have, to think that he feels the pain of 300 million people. Meanwhile, Baylen delusions of godhood center around soda taxes and their relationship to obesity and diabetes. Rather a peculiar specialization of omniscience, but similarly delusional.

  26. And the thing is, it’s a lie that *he* is unaware of such evidence himself. Is he unaware that *calories* are required make you obese, and that many sodas have *calories*? Does he deny that people generally buy *less* of a product when the price goes up? If they buy less soda, they probably consume less soda, and probably consume less calories, and probably are less obese.

    You could say the same thing about any food. It’s similarly straightforward and obvious that a random tax on a food product similarly has some *evidence* that it reduces obesity by reducing the calories purchased, and therefore consumed. But the evidence in the case of soda is much greater, because all the *evidence* that sugars (and even calorie free but artificially sweetened sodas!) are particularly bad for obesity and diabetes, compared to other foods.

    There is plenty of evidence for the proposition. Argue against that evidence, but don’t claim it doesn’t exist.

    1. I think this is right on. You don’t need to deny the link between empty calories and obesity to make a choice based argument against taxing it. It’s just more honest to argue “this could reduce obesity but maybe they enjoy soda and can choose for themselves.”

      I think it’s also true that ending farm subsidies should be the first order of business here. This is basically piling a disincentive with design flaws onto an incentive with design flaws.

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  30. Philadelphia’s Mayor Jim Kenney has already announced his proposed a three-cents-per-ounce soda tax to pay for universal pre-K will also be used for other projects. Politicians just can’t keep their hands off tax money raised for one project, it soon gets spent on others. Classic example is the states Lotteries, billed as for education purposes but widely spent on other things.

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  33. A soda tax is a win-win for government busybodies. If it works, then less soda is consumed. If it doesn’t, more tax money rolls in. Heads government wins, tails consumers lose.

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  39. RE: Are Facts Turning the Tide Against Soda Taxes?

    “Despite a ballyhooed soda tax, it seems soda sales are rebounding in Mexico. Soda tax supporters appear flummoxed, but undaunted. Their argument: it was hot. Really. Since 2015 was warmer than 2014, tax supporters argue, that can help explain the increase in soda consumption in Mexico.”

    No comedian is clever enough to make this shit up.
    I can see why the sane Mexicans leave their country.

  40. The problem with sodas is that so many of them are as bad for your health as smoking, or any number of workplace hazards. The high fructose corn syrup is bad for your liver. The sparkling water, for your bones. The sugar can make you diabetic. Govt may not have the right to tax them, but they do to make that clear, especially when insurance is involved.

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  46. these work either way. either consumption goes down or tax income goes up. people just start getting pissy at the extremes.

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