Currently browsing posts about: Taxes

David Leonhardt’s column in the business section of today’s New York Times, takes on soda taxes.  It’s starting point is the New England Journal of Medicine article (see earlier post) by Kelly Brownell at Yale and New York City Health Commissioner Tom Frieden, the newly appointed head of the Centers for Disease Control and Prevention .  Leonhardt notes that such taxes are Pigovian (after the economist Pigou): they discourage unhealthful practices and encourage healthful ones.  As he puts it, “In coldly economic terms, you can make a case that calories are the single best candidate for a Pigovian tax.”

Leonhardt finds arguments for soda taxes compelling.  He tried, but could not get any soda company executive to speak to him about them (why am I not surprised).

I’m intrigued by the accompanying illustration.  In the last ten years, the cost of fruits and vegetables has gone way up.  The cost of sodas is way down.  Isn’t something wrong with this picture?  Isn’t now a good time to try to fix it?

Update June 3: Editorial in the New York Times: “While we wait [for bigger fixes], Congress could impose an excise tax on sugary drinks – one of the main culprits in the obesity epidemic.”

Kelly Brownell of the Yale Rudd Center and Tom Friedan of the New York City Health Department write that taxes on sodas make sense as a way to get people to consume less of them (New England Journal of Medicine, April 8).  Cutting down on sugary drinks is the first thing to do to control weight.  Brownell and Friedan lay out the arguments for and against soda taxes and conclude that this approach has significant potential for improving health. Take a look at the paper and see if you agree.

In the meantime, Corby Kummer at the Atlantic Food Channel writes about what’s happening in Washington on this very issue.  And David Katz responds to comments from the Beverage Association about the paper (hint: they didn’t like it).

Remember New York State Governor David Paterson’s idea about taxing sodas to raise funds for health care? According to news accounts, New York State Governor, David Paterson, now says his proposal to tax sodas is just a rhetorical device.  He didn’t really think it would ever pass.  He just wanted people to talk about how to do something to prevent childhood obesity.  Chalk this one up as a win for soda companies?

Update February 19: here are Kelly Brownell’s thoughtful comments on the matter.

I have an op-ed (about the FDA’s handling of melamine in U.S. infant formula) and a Food Matters column (answering questions about salt) in the San Francisco Chronicle this week, and a response to a question from Eating Liberally about Governor Paterson’s proposed tax on soft drinks.  Enjoy!

Here’s the proposed statute. The relevant section reads:

“Create Sales Tax on Soft Drinks. Imposes an additional 18 percent rate of sales and compensating use taxes on fruit drinks that contain less than seventy percent of natural fruit juice and non-dietetic soft drinks, sodas and beverages. By increasing the price, it will discourage individuals, especially children and teenagers, from excessive consumption of these beverages. Revenues will be directed for health care initiatives.”

And here’s the American Beverage Association’s predictable response:  hurts the middle class, nobody wants it, no science or logic behind it.  The New York Times refers to what’s happening as a “spirited debate” (I am a participant).

It will be interesting to see how this plays out.  For example, the maker of a carbonated juice drink wrote me to complain that her product, which is 50% juice and taxable, contains under 70 calories per 8-ounces in comparison to non-taxed 100% fruit juice at 110 calories/8 ounces.  Obesity is about calories, no?  Or is it really about the kinds of products people habitually drink?

Governor Paterson says he can raise $404 million in state revenues with a 15% tax on soft drinks (but not diet sodas, juices, milk, or water).   I’m curious to know what you think of this idea.  Please weigh in.