WHO Calls for Punitive Booze and Soda Taxes on the Anniversary of Prohibition Repeal

Nannies never fall out of love with failed authoritarianism and curbs on freedom of choice.

How do you mark the anniversary of Prohibition's repeal? At Reason we celebrate the hard-won victory of (relative) sanity that led to the passage of the 21st Amendment repealing the 18th Amendment and clearing the way for Americans to again (legally) consume alcoholic beverages. We also point to lessons that can be learned from failed efforts to use the force of law to prevent people from making their own choices.

But if you're an international nanny-stater, you use the day to call for restrictions on popular beverages.

International Nannies Push "Healthier" Behavior

"WHO calls on countries to increase taxes on alcohol and sugary sweetened beverages," the World Health Organization headlined a December 5 press release, precisely 90 years after the ratification of the 21st Amendment. "The World Health Organization (WHO) is releasing today new data that show a low global rate of taxes being applied to unhealthy products such as alcohol and sugary sweetened beverages (SSBs). The findings highlight that the majority of countries are not using taxes to incentivize healthier behaviours."

Admittedly, WHO is a meddlesome world organization, so one can't expect it to always be aware of important political dates in any one country. Still, the irony is rich enough to make you reach for something sweet and buzz-inducing. Why not double down on control-freakery on a day when Americans with a modicum of historical awareness reflect on the defeat of such efforts?

That said, WHO didn't call for outright bans on sweet and boozy drinks. The idea is to hike prices through the tax system so that people—presumably those with less money—can't afford them and therefore become slimmer and more sober.

"Taxes that increase alcohol prices by 50% would help avert over 21 million deaths over 50 years and generate nearly US$17 trillion in additional revenues," insists WHO.

WHO also points to polling data showing that majorities in multiple countries support sin taxes on alcohol, sugary drinks, and tobacco. Presumably, those surveyed could purchase fewer such products of their own accord but want pressure applied from above on those who might choose differently.

But what people support in the abstract isn't the same thing as what they actually do when living under real-life policies. Laws and unintended consequences have a funny way of colliding again and again.

Nanny Policies Meet Unintended Consequences

"Substitution to untaxed beverages with no added sugars (e.g., water) is an intended goal of SSB [sugary sweetened beverage] taxes," noted a 2021 brief from the University of Illinois Chicago's Policy, Practice and Prevention Research Center. "However, substitution to unhealthful products is a possible unintended consequence. For example, a tax on SSBs may induce substitution to sweets or salty snacks, if an individual is looking to obtain alternative high-sugar or high-calorie foods."

In fact, research on the results of Seattle's soda tax found that increased prices drove people to buy more sweet snacks and beer. That means calories consumption just shifted around in terms of their sources, not necessarily reducing what was ultimately consumed.

"There is no evidence from anywhere around the world which shows that these policies lead to a reduction in weight, obesity or even overall calorie intake," comments Christopher Snowdon of the Institute of Economic Affairs in the U.K., which has had a sugar tax for five years.

People can also evade taxes by crossing borders to cheaper jurisdictions, as Norwegians did to purchase lower-taxed sweets in Sweden when their country adopted a sugar tax. Americans have been jumping city and state lines for decades to escape punitive sin taxes on alcohol, as well as shipping and distribution restrictions that limit choices.

"High taxes and limited enforcement have New York City awash in illegal booze and cigarettes," Crain's New York Business trumpeted a few years ago.

Cigarettes are a perfect case study because taxes on them are so high: $4.35 in New York state, plus $1.50 in New York City. That creates an incentive to find ways around the sin tax, legal or otherwise.

"Excessive tax rates on cigarettes induce substantial black and gray market movement of tobacco products into high-tax states from low-tax states or foreign sources," warns the Tax Foundation. "New York has the highest inbound smuggling activity, with an estimated 54.5 percent of cigarettes consumed in the state deriving from smuggled sources in 2021."

Regulators of the newly legal (in some states) marijuana industry seem dedicated to replicating all of the errors of tobacco and alcohol regulation. They're hobbling legal operators and keeping the already thriving underground market awash in cash.

"Steep taxes and heavy regulation are making it hard for licensed pot sellers to operate in some states, driving more producers and buyers to illegal outlets," Zusha Elinson and Jimmy Vielkind wrote in The Wall Street Journal earlier this year.

The lessons of Prohibition may be fading into the mists of history, but that article was published eight months ago. There's no reason to believe that alcohol taxes already being evaded where they're too high won't continue to be evaded if hiked even further. And the evidence already suggests that taxes and restrictions on sugary drinks—or any other "sin" enjoyed by the public—will have the same outcome.

What About Freedom of Choice?

Of course, all of this treats high taxes and other efforts "to incentivize healthier behaviours," as WHO puts it, as just a set of policy choices among many, to be adopted if they work or discarded otherwise. But there's also the reason that people so vigorously undermine restrictive policies: They want to be free to make their own choices.

Prohibition failed because it was actively resisted by drinkers who resented being deprived of their freedom of choice. Taxes on sugar, alcohol, and other sins are similarly fought by people who believe they have the right to make their own decisions, even if public-health nannies disapprove. Freedom has a value of its own, separate from the obesity and mortality figures bureaucrats obsessively peruse.

"Taxing unhealthy products creates healthier populations. It has a positive ripple effect across society—less disease and debilitation and revenue for governments to provide public services," huffed Dr. Rűdiger Krech, Director of Health Promotion for WHO.

Some of us might say that freedom is what gives life value, and that slimming us down and extending our span on this Earth at the expense of our liberty is a lousy tradeoff.