You can judge a society by how much a sugary beverage costs
May 20, 2010
Tuesday’s New York Times had a terrific article by David Leonhardt on The Battle Over Taxing Soda. Leonhardt does a wonderful job arguing in favor of a soda tax (currently being considered in DC), drawing parallels to cigarette and alcohol taxes.
What struck me most was the shocking chart at the top. Not only has the price of carbonated non-alcoholic drinks dropped by 34% since 1978 (adjusted for inflation and relative to other foods), but fresh fruits and vegetables have also become substantially more expensive than they used to be.
This penny-per-ounce tax would essentially bring the cost of soda back to where it was in 1978 (in today’s dollars).
He also made a couple of key points regarding taxation-as-deterrent, that were rather salient:
(1) Taxes should be levied on products and services that have an inherent cost to society (in this case, healthcare), in order to deter people from purchasing those items and to help offset the costs.
(2) The tax increases must be large enough to reduce consumption or they only serve to burden the consumer financially.
Check out the entire article, it’s well worth the read.
Oh, and here’s a followup article from Wednesday’s NYT, saying that they’re now considering not including diet sodas in a proposed tax for New York.
Hey Eric – I have no doubt there’s a correlation between the two — since obesity levels have gone up as sugared beverage prices have gone down. Of course, it’s harder to prove causation. Having said that, there have indeed been quite a few studies recently that have shown a direct, causal link between liquid calories (soda, fruit juice, etc) and obesity. I’ll be writing about that more soon… I agree it’s ridiculous that legislators won’t implement these taxes more readily. The arguments against them are absolutely ludicrous. (Did you read anything the lobbyists for Coke and Pepsi were quoted as saying? It’s preposterous and are bordering on non-sensical.) They seem to have forgotten that soda is a non-nutritive, completely unnecessary, luxury item. I don’t think there’s an “inalienable right to drink soda” clause in the constitution, is there? Hopefully, someday we’ll look back on this and go, “What were… Read more »
i wish this kind of tax would be taken more seriously in legislatures around the country. it would be interesting to plot incidence of diabetes (type 2) vs. cost of soda and see if there is a real correlation…