I’ve got a story in this week’s magazine about the movement among state and local governments to tax soda. Such taxes are seen as a way to both raise revenue and discourage consumption of a product linked to obesity (and, in turn, rising health costs). As Kansas state senator John Vratil told me, “I thought we might kill two birds with one stone.” The soda-company employees who swarmed a Kansas senate hearing room earlier this year said something else: that a soda tax would kill jobs, disproportionately burden the poor and constitute an unwelcome government intrusion into the American diet. (Never mind the corn-industry subsidies that keep sweetener cheap in the first place.)
I would normally link to the article here, but there is another experiment afoot: Time is now selling its magazine content instead of giving it away for free. A company that sells its products?! You can read my story—and all the others in the magazine—by buying this week’s issue on a newsstand, as part of a print subscription or via the iPad. Please do!
Anyway, the story is pretty even-keeled (if I do say so myself), so I thought I’d use the blogosphere to write a slightly edgier bonus reel.
First of all, there’s not any convincing evidence that a soda tax would cost people their jobs. Yes, a penny-per-ounce tax would raise the price of a 2 liter bottle of soda by 68 cents, and that would surely cause people to buy less of it. But does that mean they’d switch over to tap water? Or that they’d buy more Minute Maid and Ocean Spray fruit juice, Nestea and Lipton iced tea and Aquafina and Dasani bottled water? Coca-Cola and PepsiCo own all those brands, too. When Coke and Pepsi send their truck drivers to statehouses around the country to talk about how they’re afraid they’ll lose their jobs (because their bosses just said that they might!), it’s very bad form indeed.
Second, such taxes have not failed to control obesity before. It was really disgusting to watch soda industry people tell the members of DC’s city council that Arkansas and West Virginia have had such taxes on the books for years, and yet still rank high for obesity among the nation’s states. As anyone testifying on this issue would—or should—know, the taxes in those two states are a fraction of what’s currently being debated. They haven’t had any effect on the population’s weight, because that’s not what they were designed to do. In West Virginia, the tax, which helps funds West Virginia University’s medical center, amounts to a penny for each 16 9/10 ounces. In Arkansas, the tax is 21 cents per gallon, or 0.16 cents per ounce. Both are a far cry from the 1-to-2-cent-per-ounce strategy discussed in states and cities from New York to Baltimore this spring.
Third, while there is plenty of evidence that our collective soda consumption has skyrocketed and that all those empty calories help us pack on the pounds, it is still not super-clear whether drinking less soda leads to weight loss. It’s true that the typical American drinks 500% more soda than he did 60 years ago, and that of the 250-300 calories a day added to the average American diet since the late 1970s, nearly half have come from sugared drinks. What’s not clear is whether or not people turned off to soda will simply consume another high-calorie drink. In this recent study, researchers found that when kids drink less soda they drink more whole milk. Switching out a 140-calorie can of soda for a 225-calorie glass of milk may be desirable—milk is nutritious; soda isn’t—but the substitution illustrates the risk of assuming less soda necessarily means less poundage. As a heavy-set member of the DC city council said in one meeting, “There is an obesity problem. I’d say I’m an expert on that. But I don’t like soda. I don’t drink it.”
Fourth, comparisons of soda to cigarettes are overplayed. I appreciate the plight of policy makers, who are up against the insane lobbying power of Big Soda. Two years ago beverage companies spent some $5 million to force and win a referendum on Maine’s soda tax. To put that in perspective, in 2006 Maine’s governor spent $1.3 million on his entire re-election campaign. Nonetheless, equating soda, which will make you fat, with cigarettes, which will kill you, is a bit of a stretch. Rather than turning certain companies into villains, I think it’s more productive to expose the many ways they surreptitiously exert influence and guide thinking—one DC council member was against taxing soda because Powerade, a sports drink owned by Coca-Cola, sponsors events with the city’s department of parks and recreation. But maybe I just don’t get how to play politics.
At the end of my reporting, I continued to be intrigued by the idea of driving up the price of soda to reduce its consumption—various studies show that a 10% increase in price leads to roughly a 10% drop in sales. Is this a clear-cut public policy move? No. But, then again, there aren’t any clear-cut public policy moves. Anyway, what’s more important that my fascination is the fascination of state and local elected official around the country. As I say in the story, most of the 20-odd proposals floated this spring went nowhere. But talk to the people behind those proposals, and you’ll quickly see that this idea isn’t disappearing anytime soon. As Kansas state senator Vratil said to me, “I figured it wouldn’t pass in the first year. It normally takes two to three years to educate legislators.”
