Why Sin Taxes on Sugar, Soda Are a Questionable Idea

A Quinnipiac poll suggests that New Yorkers oppose what the polling company calls a "fat tax" -- excise taxes on sugary drinks -- that Gov. Paterson is proposing to help close the budget gap. Earlier in the year, Democratic members of Congress mused about a national version of a soda or sugar tax, and the nation's most experienced obesity fighter, Tom Freiden of the CDC, believes that there will be no solution to the obesity epidemic without one. Here's why I'm skeptical.

If the goal is to reduce obesity, whatever set of policies we focus on, they ought to be tailored to those who are most vulnerable to becoming obese and who haven't yet crossed the threshold: kids. Once we've crossed the threshold, it's hard to reverse course, unless we radically change our physiology. Since our bodies haven't changed much since the 1960s, the answer to the enormous challenges posed by childhood obesity must lie in the complex interactions between an individual's biology, his or her interaction with society, and the larger environment itself.

I don't think the behavioral economic approach -- taxes and such -- readily applies in this context when there is so much variation within individuals and within and across distinct population subgroups. Eating is not an option; it is not a sin; it is not like putting gasoline inside a car. Where incentives help, they ought to be directed toward those who help control the environment of vulnerable populations.

I get how a soda or sugar tax works in theory, even well-designed ones, but I don't see how they work in the world outside of Plato's cave. Not only is obesity a rational response to the pressures of the age we live in, it is also fairly automatic. I'm not arguing against experiments, but I don't see how the negative externalities of such a tax wouldn't (a) reinforce the fat stigma, which is dangerous and (b) make life harder for those families who already have life pretty hard.

We must break free from the individual choice paradigm here; until we can reasonably be certain that individuals will respond properly and correctly to behavioral nudging, I fear the damage will be worse than the benefits, and that politicians will decide that they've done what they can and move along.

I also resist the moral implications of using these taxes to raise revenue during a recession. If we are going to tinker with incentives, let's do so in an additive, positive way. Let's make it profitable for vulnerable families to make sure their kids get eight hours of sleep a night...that women get better prenatal health care...that buying healthy foods becomes moreĀ 
efficient and easier...that buying healthy foods becomes cheaper.