Filed Under: Soft Drinks

Soda Taxes (Still) Don’t Work

A new study released reaffirms what we have known for ages: Soda taxes are pointless, unless your goal is a regressive tax to fund bloated government. 

Advocates typically pitch soda taxes as a public health measure, arguing they will reduce soda consumption. But the study, the result effort of researchers from the University of Iowa and Cornell University, found that soda taxes didn’t have a large effect on the public. Using the recent legislation in Oakland and Philadelphia, the researchers analyzed the buying activity of sweetened drinks before and about a year after the legislation was passed.

The researchers found the taxes had little to no effect on people’s buying habits. The study found that the key groups that were most affected were the poor and small businesses.  

According to the study, nearly 90% of businesses polled in Philadelphia and more than 70% in Oakland reported a decrease in sales of affected beverages. Considering the sale of packaged beverages make up more than a fifth of gross-profit for convenience stores, these taxes can have long-term negative effects on small businesses.  

The taxes didn’t affect the frequency in which children drank sugary beverages. In adults, the study found that the amount of sugar consumed only decreased an average of a few grams–essentially nothing. 

The tax did drive those who shop both in the city and in neighboring areas to start procuring their beverages from the neighboring areas. This is predictable behavior we’ve seen elsewhere. After Seattle passed a soda tax, one retailer invited customers to shop outside the city

This is not the first time research has shown government attempts to limit sugar-sweetened beverage intake to be ineffective. A study from UC San Diego found that, when the size of the soda they could buy was restricted, consumers were more likely to purchase more soda. (Think: drinking and refilling one medium instead of drinking one large.) 

Nanny state politics aren’t effective. If legislators really want to see a change in their community they should focus on real problems such as homelessness, not what people drink.    

 

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