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April 7 2016

Five Reasons Why You Should Care About Soda Taxes

American Beverage Association
featuring Julie Gunlock

Discriminatory taxes on beverages have been rejected in cities and states across America more than 40 times. Despite being deeply unpopular, some activists and politicians continue to push for them. In a new policy brief, Julie Gunlock from the Independent Women’s Forum breaks down five reasons why Americans should care about beverage taxes. We at Sip & Savor offer our thoughts on her five below. Beverage taxes:

•  Harm America’s hardest working families:

Taxes on common grocery store items like beverages are regressive – meaning they hit lower-income families the hardest. In Mexico, where a one-peso-per-liter tax on sugar-sweetened beverages was implemented in 2014, it was found that 63.7% of the revenue raised came from lower-income families.

•  Lead to higher food costs:

From Gunlock’s paper, “According to the USDA, grocery prices are expected to rise an additional two to three percentage points in 2016. Soda taxes will increase costs further, hurting the poor as well as local grocery stores, which may lose customers as shoppers seek to avoid the tax by going outside of city limits.” As businesses lose customers, they have to lay off staff leading to job loss. Ultimately, a community may lose small businesses due to the tax. After the implementation of the Mexico soda tax, more than 30,000 small mom and pop stores closed, resulting in the loss of 50,000 jobs. These taxes have far-reaching consequences.

•  Facilitate government waste:

More and more politicians are supporting beverage taxes not as a way to tax people into “health” but as a revenue-grab to fund new government programs. As Gunlock points out, “While there may be worthy government programs that deserve funding, leaders should better prioritize these projects and cut the wasteful and duplicative programs that already exist.”

•  Fail to combat obesity:

Beverage taxes are often touted by activists as an easy way to curb obesity rates, but the research does not support this notion. First, federal data on the U.S. diet shows unequivocally that sugar-sweetened beverages are not driving obesity. Sugar from soda dropped 39 percent since 2000, while at the same time the rate of obesity and diabetes climbed steadily year after year up to 24 percent in 2014.

Second, taxes on foods and beverages don’t improve public health. A study conducted in 2015 on the Mexico soda tax found that it has resulted in a decrease of only 6 calories per day in an average daily diet of more than 3,000 calories. An earlier study from the Yale School for Public Health showed no impact on adult BMI with taxes. Even if a tax on soda was set at 58 percent, BMI would decline by an amount not even measurable on a bathroom scale.

•  Eat away our freedoms:

Ultimately, what you eat and drink should be up to you. The beverage industry in particular looks to consumer wants when innovating. We are providing consumers with a wide range of no- and lower-calorie beverages and smaller portion options. We also give them important fact-based information with our front-of-pack calorie labeling so they can choose the beverage that is best for them.

The most effective way to encourage changes in behavior is education on leading a balanced lifestyle. Our industry is helping to support neighborhood programs that teach good diet techniques through the U.S. Conference of Mayors Childhood Obesity Prevention Awards. We have supported First Lady Michelle Obama’s “Let’s Move!” initiative and her “Drink Up” campaign to encourage more water consumption. We’re also working toward an aggressive goal to reduce beverage calories in the American diet by 20 percent by 2025 with our Balance Calories Initiative. This single-largest effort by an industry to combat obesity involves working with community partners in test-and-learn markets across the country. Collaboration on meaningful solutions works. Taxing does not.

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Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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