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Are Government Soda Taxes Fair?

By Malkie Khutoretsky
 Unsplash: Photo by Alexandra Nosova
*Updated 2024
Sugary drinks, including soda, make up a quarter of all the added sugar in the average American adult’s diet. In 2019, the American Heart Association and American Academy of Pediatricians both officially endorsed soda tax as a way to reduce childhood obesity. Starting about a decade ago, several cities throughout the US proactively started passing a tax that raises the price of soda, and the World Health Organization has since hopped on the bandwagon, encouraging countries to raise taxes on soda as a way to promote better health. The aim is to reduce beverage calories consumed per person nationally by and get Americans thinking about their dietary choices. Although this seems to be in the best interest of the nation, many are questioning why government intervention is needed when deciding what groceries we buy.


The following are three arguments suggesting the soda tax is a sign of responsible American government, and three arguments questioning its place in American society.


The Soda Tax Is a Good Idea


It can curb obesity

America is the 12th most obese country in the world but number one when it comes to high-income countries, according to Forbes. Rising consumption of sugary drinks has been a major contributor. This is because many people ignore the amount of calories in their soft drinks. A typical 20-ounce soda contains 15 to 18 teaspoons of sugar and adds around an extra 240 calories to one’s daily intake. For those who drink more than 20 ounces of soda a day, a soda tax may make them think twice before adding these “empty calories” to their meal. In fact, five large cities across the US that have implemented a soda tax have seen a 33% reduction in the volume of soda purchases since the tax went into effect.


It worked with cigarettes

Just as the cigarette tax saw a decline in cigarette smoking, the soda tax has real potential in taking some of the power from the profit-driven soda industry. Research shows that, nationally, every 10% rise in cigarette prices has reduced smoking in adults by 2%, in young adults by 3.5% and in children by 6-7%.  It’s not surprising, then, that the soda industry has spent at least $107 million at state and local levels over the past decade fighting soda taxes. However, these taxes, as well as warning labels, allow Americans to make educated decisions about their health and food choices. Evidence suggests that warning labels effectively reduced smoking. Similarly, a John Hopkins Bloomberg School of Public Health study also suggests that labels can reduce soda consumption.


Investing in America

The government uses its budget to provide for its citizens, and a soda tax seems to be a good way to grow the budget. Harvard researchers suggest that the tax could assist 36,000 people per year in avoiding obesity, prevent 2,280 diabetes cases annually, prevent 730 deaths over ten years, and save nearly $200 million in health spending.


It’s a win-win for Americans: they’ll either stop drinking unhealthy beverages or they’ll contribute to the country. Tax payers’ dollars could officially go towards paying back the national deficit. Alternatively, these tax dollars could go towards Medicaid and healthcare subsidies, serving the nation’s citizens over the long term. This budget increase could see the implication of better school lunch services, community playgrounds and health education classes to counter obesity.


The Soda Tax Is Wrong


It infringes on free market principles

Soda taxes, as with all food taxes, infringe on Americans’ rights to a free market. Let’s break it down: Our forefathers decided that America would be a democratic system built on capitalism and fueled by the free market. Capitalism works on the basic principle of supply and demandwhich is a consumer-driven system. If that’s the case, then shouldn’t each state’s government listen to what their constituents want?


The basic DNA of a democratic society is choice. Once we start taxing people for beverages against their will, where does it end? Even when alcohol was banned during Prohibition, people still found a way to consume it. A soda tax most likely won’t deter consumers from buying soda.


It only treats a symptom

Around 90% of the calories we consume come from food while only 6% of calories come from drinks. This suggests that America’s preference for sugary drinks is part of a bigger problem. Therefore, a soda tax is merely a band-aid to treat a symptom. Instead, government intervention should be about working with communities toward finding sustainable ways to bring communities affordable, healthy groceries and dietary education programs. One initiative raises awareness about the unintended consequences of food and beverage taxes, especially for working families who can’t afford higher-priced groceries. An alternative would be for the government and soda industry to invest their resources in developing healthier and affordable beverage (and food) options for consumers.


Food stamp inconsistency

The Supplemental Nutrition Assistance Program (SNAP) is currently providing nutrition assistance to millions of low-income individuals and families who rely on food stamps for their dietary needs. According to SNAP, no American on its program is supposed to be hit with excess tax on food purchases made with food stamps. To keep in accordance with SNAP regulations, grocers provide refunds, after purchase, on foods or soda that are taxed to those on the program. However, once a low-income customer is refunded, he or she is then taxed an additional amount for the refund itself. It’s a lose/lose for these Americans.


The Bottom Line: The American diet is due for a change. But, should this change come from the government? Is it possible that the government’s soda tax is a quick fix to avoid developing long-term nutritional options needed for lasting change?

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