Sugar Tax

Philadelphia mayor Michael Nutter recently proposed a so-called soda tax of 2 cents per ounce on the sale of sugary beverages.  A similar proposal, at 1 cent per ounce, is backed by New York governor David Paterson and Mayor Michael Bloomberg.  The motivation behind these proposals is ”to curb obesity and recoup some of the billions of dollars a year spent on healthcare to treat people with diabetes and other disease.”

I dislike these proposals for many reasons.  First, the math just does not work.  2 cents per ounce equates to an additional charge of $2.88 per 12 pack of cans, an increase of 65% over Peapod’s price of $4.50.  A 2 liter bottle will have an additional charge of $1.35, an increase of 90% over Peapod’s price of $1.50.  65% and 90% increases, really?

On the other end of the scale, a 17 ounce bottle that costs $1.69 will have an additional charge of 34 cents, an increase of only 20%.  The tax hits harder when more volume is purchased.  Smaller bottles tend to already cost more due to the “convenience” factor.  If the target of these proposals is kids walking home from school stopping at their local convenience store then the tax should specifically target single serving containers.

Given that a 17 ounce bottle of soda would go from $1.70 to about $2.00, will a student stopping with his friends purchase something healthy instead of soda?  Will the tax overcome the peer pressure against buying milk?  Do kids even look at the prices of the drinks?  Will $2.00 make them look at something else that costs only $1.70?  If kids cared about stretching their dollar they wouldn’t be stopping at the store at all, filling up a water bottle instead.

My household has no children.  I excercise, and try not to drink too much soda.  Why should I pay a sugar tax?  I am not at risk for diabetes.  I see my physician once a year.  If I want to enjoy a soda why should I pay a sin tax?

Studies show that sin taxes do not work.  In fact, the soda tax may take so much more money from the family budget that parents need to work longer hours, reducing hours available for excercise with their children and forcing parents to work during meal time, eroding further the eating habits of their children.  The soda tax could actually make kids fatter!

It seems to me that the government is trying to become the parent of the household.  It is parents’ jobs to have their children eat properly.  No family that I know lets their kids drink soda.  Drinks at meals are usually milk, water, or some other healthy beverage.  Good eating habits and healthy excercise start at home, with the parents, not with a soda-sin tax mandated by the government.

What’s next, a calorie tax – the McTax?