Fat chance? Can soda taxes help solve the obesity epidemic and state budget woes?

A recent report released by the Trust for America’s Health and the Robert Wood Johnson Foundation announced the latest alarming figures about the spread of obesity in America. They found that last year in 31 states, including Oklahoma, more than one in four residents was obese  (obesity is measured as a BMI, or Body Mass Index, >30, or 30 pounds overweight for a 5’4″ person). Last week, this new study from the Economic Research Service of the United State Department of Agriculture (USDA) examined one solution to the obesity epidemic that is gaining increasing attention: a tax on sodas,  similar to the tax on cigarettes that governments have long imposed at least in part to discourage unhealthy and costly behavior.

The USDA study suggests that a tax on “caloric sweetened beverages” – which have been found to be the single most significant contributor to obesity –  would be an effective tool for reducing consumption and fighting obesity:

This study estimated that a tax-induced 20-percent price increase on caloric sweetened beverages could cause an average reduction of 37 calories per day, or 3.8 pounds of body weight over a year, for adults and an average of 43 calories per day, or 4.5 pounds over a year, for children. Given these reductions in calorie consumption, results show an estimated decline in adult overweight prevalence (66.9 to 62.4 percent) and obesity prevalence (33.4 to 30.4 percent), as well as the child at-risk-for-overweight prevalence (32.3 to 27.0 percent) and the overweight prevalence (16.6 to 13.7 percent).

The USDA study confirms earlier research that produced similar findings about the impact that taxes would have on decreasing consumption and reducing obesity rates.

Some observers believe that the promise of significant health benefits from a soda tax, combined with the promise of new revenues for increasingly strapped government budgets, adds up to a politically potent combination. Joe Wiesenthal, the Deputy Editor of The Business Insider, posted this chart from the USDA study under the headline, “This is the Chart that Frightens the Soda Companies”: 

Similarly, the National Review’s Reihan Salam responded to the USDA study by suggesting that soda taxes are “inevitable”.

However, if the combination of health concerns and prolonged budget strains is enough to get a growing number of policymakers and health advocates talking about a soda tax, getting voters and state legislators to support the idea is anything but a slam-dunk. In New York State, a proposal for a penny-an-ounce tax on soda and other sweet drinks that was heavily promoted by Governor David Patterson and a coalition of labor and health care advocates was shot down. As this New York Times article reveals, the beverage industry, supported by grocers and the Teamster union, mobilized massive resources to kill the proposal. Organized as “New Yorkers Against Unfair Taxes”, the opponents’ messages resonated with anti-tax sentiments among legislators and the public. The industry’s arguments that the tax is regressive and would hit low-income residents especially hard convinced at least some advocacy groups for the poor,  including the Food Bank of New York City, to oppose the measure.

Soda tax supporters did win some victories this year – Washington State approved a tax of two cents per 12 ounces, while Colorado will no longer exempt sodas and candy from the sales tax, among other items. But in addition to the big defeat in New York, soda tax proposals have failed in Washington, D.C., Philadelphia and elsewhere.

So, does the idea stand a chance in Oklahoma? There were unconfirmed rumors during the last legislative session that a soda tax proposal was at least being considered, although the idea was never publicly broached. Legislators who might be unwilling to consider raising the income tax or the general sales tax might be receptive to taxing soda, especially if revenues were earmarked towards public health initiatives. At the same time, mustering even a simple majority to approve sending a tobacco tax increase to a vote of the people was barely possible in 2004 back when the Democrats controlled both legislative chambers. Given today’s Republican majorities and the fact that soda drinkers who would be affected by a new tax are likely to vocal and passionate in defending their habits, one’s tempted to say  “fat chance” of any proposal making it into law anytime soon. But as awareness of the serious consequences of the obesity epidemic grows, expect to see a tax on soda emerging as a solution that more people are willing to swallow.

ABOUT THE AUTHOR

Former Executive Director David Blatt joined OK Policy in 2008 and served as its Executive Director from 2010 to 2019. He previously served as Director of Public Policy for Community Action Project of Tulsa County and as a budget analyst for the Oklahoma State Senate. He has a Ph.D. in political science from Cornell University and a B.A. from the University of Alberta. David has been selected as Political Scientist of the Year by the Oklahoma Political Science Association, Local Social Justice Champion by the Dan Allen Center for Social Justice, and Public Citizen of the Year by the National Association of Social Workers.

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