Centuries ago in the Wealth of Nations, famed economist Adam Smith urged policy-makers to raise money by taxing three widely used products: tobacco, rum and sugar. Governments around the world have since raked in revenues from so-called sin taxes on alcohol and cigarettes and, at the same time, have improved public health by reducing consumption of unhealthy products.
Now, a trio of researchers who have received funding from Robert Wood Johnson Foundation (RWJF) programs is calling on lawmakers to tax the third leg of Smith’s revenue-generating stool to help curb childhood obesity.
Not so fast, say a different pair of RWJF scholars.
Jason Fletcher, Ph.D., an associate professor at the School of Public Health at Yale University and an RWJF Health & Society Scholar (2010-2012), and David Frisvold, Ph.D., an assistant professor of economics at Emory University and an alumnus of the RWJF Scholars in Health Policy Research program (2006-2008), argue that taxes on sugar-laden carbonated sodas have little effect on obesity rates. Nathan Tefft, Ph.D, an assistant professor of economics at Bates College, co-authored the articles, which were published this summer in the Journal of Policy Analysis and Management.
“We were hoping we could highlight an easy, low-cost way of reducing obesity for a lot of people,” Fletcher says. “But we didn’t find evidence that soda taxes will do that.”
Increasing soda taxes by one percent causes children and adolescents to consume only six fewer calories from soft drinks per day, Fletcher and his colleagues found in a 2010 study funded by RWJF. That’s because children and adolescents tend to substitute taxed sodas with other high-calorie beverages such as juice and milk, they found.
Substituting milk and juice for soda will improve overall health, Fletcher acknowledged. But it won’t do much to reduce childhood obesity—the explicit goal of the taxes.
RWJF-Funded Scholars Disagree with Fletcher in Back-to-Back Articles
Researchers Frank Chaloupka, Ph.D., a professor of economics at the University of Illinois at Chicago who has a long-standing funding relationship with RWJF, disagrees in a pair of articles that appear alongside those written by Fletcher and his colleagues. In their articles, Chaloupka and his co-authors, Lisa Powell, Ph.D., a research professor at the University of Illinois at Chicago, and Jamie Chriqui, Ph.D., M.H.S., a senior research scientist at the Institute for Health Research and Policy at the University of Illinois at Chicago, counter the argument that soda taxes have little effect on obesity.
Taxes on cigarettes and alcohol have been shown to reduce consumption of those two unhealthy products and thereby have improved public health, and taxes on sugar-sweetened beverages (SSBs) would have a similar effect, they argue. These taxes would help reduce consumption and, the preponderance of evidence suggests, thereby reduce obesity rates. Soda taxes would also promote healthier alternatives and raise money for obesity prevention programs, they write.
“The bottom line is that sizeable new SSB taxes are a win-win-win for policy-makers: They will generate significant new revenues, lead to significant reductions in SSB consumption that will almost certainly reduce obesity, and are popular with the public when the revenues are used to support obesity prevention efforts,” Chaloupka, Powell and Chriqui write.
Fletcher and his colleagues respond in a subsequent article in the same edition of the Journal of Policy Analysis and Management that “perhaps surprisingly, there are few compelling studies that can explicitly make a causal claim for a connection between soda consumption and obesity.”
The debate comes amid a national discussion over how to combat soaring obesity rates. About one in three adults and nearly one in five children and adolescents in the United States are obese, according to the Centers for Disease Control and Prevention. That is a dramatic increase over the recent past, and one that has coincided with greater consumption of carbonated sodas, sports drinks, sweetened teas and other sugary beverages. Chaloupka, Powell and Chriqui point to studies that link obesity with the rise of these types of sugar-sweetened beverages.
Policy-makers first proposed soda taxes as a possible method of reducing obesity more than a decade ago, and such legislation has gained traction in recent years.
Chaloupka and his colleagues are generally in favor of these kinds of taxes; Fletcher and his colleagues are more cautious. Fletcher’s group is careful to note that they aren’t opposed to soda taxes as a general concept. A tax that causes people—especially children—to drink less soda, and more juice and milk, will have a positive effect on public health, they say. But they warn against implementing soda taxes as a way to reduce obesity—the general principle underlying such legislative measures—because they will eventually be regarded as failures and rejected.
Fletcher adds that there may be some kinds of soda taxes that are effective. Implementing more substantial taxes on sugar-sweetened beverages than are currently in place, large excise taxes that push up the shelf price of soda, and broader taxes on all high-calorie-low-nutrition foods and beverages have the possibility of curbing obesity rates, as does legislation that would remove the exemption of soft drinks from sales taxes, Fletcher says.
But no research proves that these types of taxes actually do reduce obesity rates, Fletcher says. Indeed, he doesn’t think there is a silver tax policy bullet that would reach a large number of people, is relatively easy to implement, and is affordable that would significantly reverse the rise of obesity.
In response to Fletcher and his colleagues, Chaloupka’s group expresses more confidence in soda taxes as a means of helping people achieve healthy weights. Large excise taxes may be particularly effective in curbing obesity, they argue, especially if they are part of a comprehensive approach that includes a range of other interventions.
“As we’ve seen from the reductions in tobacco use in states where tax revenues are earmarked for comprehensive tobacco control programs, large taxes that are part of a comprehensive set of efforts, including other interventions, such as the restrictions on vending machines as proposed by Fletcher and colleagues would, collectively, accelerate progress in obesity prevention efforts,” Chaloupka and his colleagues write.
A comprehensive approach is one thing both sides agree on.
Fletcher’s group concludes: “Implementing comprehensive and complementary sets of policies that combine excise taxes, access restrictions in schools, and the removal of the exemption of soft drinks from sales taxes will be more effective in reducing soda consumption because singular policies are often easy to counteract through behavioral change.”