Taxing Soda Better Than Banning It?

Nanny Bloomberg's soda ban has a new critic.  A recent article by Slate suggests that the best way to force people to drink healthy would be through the use of a "sin tax" instead of an outright ban on large soda sizes -- like we need any more taxes.

Mayor Bloomberg's proposal to ban the sale of 32-ounce sodas has hit up against some serious negative public opinion of late. First there was the Million Big Gulp March, in which a sprinkling of protestors showed up to protect the right to buy supersized beverages. More problematically for the mayor, a New York Times poll found that 60 percent of New Yorkers oppose the ban. The Times' quote from Queens resident Bob Barocas bluntly summed up the opposition to the ban: "This is like the nanny state going off the wall."

No one likes to be told what to do. And if the city is banning supersized soda, some fear that it won't be long before the government will be forcing broccoli down our gullets. Maybe it's time to revisit a gentler approach to nudging New Yorkers to eat and drink more healthily by taxing sugar, fat, and other foods that help make America the fattest nation on earth.  [snip] 

A pricing experiment run at a hospital cafeteria in Boston in 2008 provides at least some indication that soda taxes may also help change drinking habits, though taken at face value its results suggest that taxation may have to be aggressive to wean soda drinkers from their beverage of choice. A team of public health researchers convinced the hospital administration to allow them to raise the price of a 20-ounce regular soda by about a third (from $1.30 to $1.75). In the weeks that followed, regular soda consumption dropped by about 26 percent, and was accompanied by a nearly offsetting increase (20 percent) in diet soda consumption. (Unlike the milk study, however, it's worth noting that the subjects of this study-cafeteria patrons at the Harvard-affiliated hospital-may not be representative of the average American.)

Government desperately needs to go on a tax diet and placing more tax dollars in front of it will only exacerbate its colossal weight problem.

These professors can theorize all the want about whether or not these taxes will affect greater good and "nudge" people's behavior, but most politicians look at this study much differently than they do.  While those that want to force people to be healthy might focus on the 26% reduction in the consumption of regular soda, most politicians would drool over the 74% that would now be paying higher taxes because they didn't conform to social engineering and change their behavior.  Better yet, that 74% would be generating revenue that is 100% higher than prior to the implementation of such a tax. 

The last sentence in the Slate article about a soda tax being a win/win gets it only half right and it's only the government that wins.  Politicians care as much about your health as the Chicago Teacher's Union and some of its teachers care about teaching kids.  It's really just about control and money.  Don't believe me -- what do you think would happen if 100% of these new taxpayers suddenly decided to become healthy after government became dependent upon this tax revenue?  We would see government sponsored soda ads just as we are now seeing government food-stamp ads (though there has been no shortage of food-stamp recipients).

If politicians really wanted to generate some hefty tax revenue, imagine what a "sin-tax" placed on every word the mainstream media writes could do?  We might even be able to solve our massive debt crisis with this tax as it's obvious that there is zero chance that social engineering such as this would change the mainstream media's behavior.      

Scott blogs at