As of Chancellor George Osborne’s March 16 budget, the sugar tax is set to return to Britain. This time it will take the form of a sin tax, levied to both discourage and profit from an act purported to be harmful to society. Osborne and some pro-sugar tax activists hope the move will help reduce obesity––especially childhood obesity––in Britain, and some of the revenues are intended to go toward physical-activity programs for children. Under the plan, by 2018, sugary drinks will be taxed based on the amount of sugar they contain, with some exemptions for fruit juice and milk.
The tax might turn into a policy export. Along with sugary-soda taxes in Mexico, local soda-tax experiments in the United States, and soda and “fat” taxes elsewhere around the world, sugar taxes are something of a policy darling in the fight to get people to eat and live healthier. And indeed sugar taxes have a long history in Britain specifically. But is imposing sin taxes good policy?
Prior to their newest incarnation as a deliberate public-health tool, British sugar taxes historically played a major role in the U.K.’s relationship with the United States. Ian Williams’s Rum: A Social and Sociable History of the Real Spirit of 1776 details how the infamous taxes in the Sugar Act of 1764 and its predecessor, the Molasses Act, helped spark the American Revolution by raising the price of the American colonies’ sweetest import and also by disrupting the production and consumption of rum, which had become as important as cash in the early colonies. The Sugar Act itself functioned as a kind of sin tax, given its impact on rum consumption, despite the fact that it was mainly intended as a revenue-raising protectionist measure. According to Gina Hames’s Alcohol in World History, the British Crown had long been concerned with the colonies’ indulgence in alcohol. So more-restrictive taxation of sugar and molasses addressed several problems at once, providing necessary cash, disrupting foreign competition, and promoting slightly less drunkenness.