Objections, Industry Reaction, Public Support and Framing
One objection to a SSB tax is that it would be regressive. This argument arose with tobacco taxes but eroded with several realities: the poor face a disproportionate burden of smoking-related illnesses and nearly all smokers begin as teenagers; both groups are sensitive to price changes.7 In addition, some of the tobacco revenue has been used for programs developed specifically for the poor and for youth. The poor are most affected by illnesses related to unhealthy diets, and brand loyalties for beverages tend to be set by the teenage years. In addition, SSBs are not necessary for survival and an alternative (water) is available at little or no cost, hence a tax that shifts intake from SSBs to water would benefit the poor by improving health and lowering beverage expenditures. Designating revenues for programs on child nutrition, obesity prevention, or health care for the uninsured would preferentially help those most in need.
A second objection is that taxing SSBs will not solve the obesity crisis and is a blunt instrument that affects even those who consume low amounts. Seat belt legislation and tobacco taxation do not eliminate traffic accidents and heart disease but are sound policies. Similarly, obesity is unlikely to yield to any single policy intervention, so it is important to pursue multiple opportunities to create incremental gains. Reducing caloric intake by 1–2 per cent per year will make a marked impact on health of all age groups, and the financial impact on those who consume small amounts would be minimal.
Opposition to a tax by the beverage industry is to be expected given the possible impact on sales, has been seen in jurisdictions which have considered such taxes, and can be predicted from behavior of the tobacco industry under similar circumstances.37 PepsiCo threatened to move its corporate headquarters from New York when the state considered implementing an 18% sales tax on SSBs.38 The tobacco industry fought policy changes by creating front groups with names suggesting community involvement. The beverage industry has created Americans Against FoodTaxes.39 These reactions suggest that the beverage industry believes a tax would have a substantial impact on consumption.
Public support for food and beverage taxes to address obesity has increased steadily. Polls have asked about taxes in different ways and hence are not directly comparable from year to year, but overall trends are clear. Support for food taxes rose from 33% in 2001, to 41% in 2003, and then to 54% in 2004.40 More recent polling shows higher support for beverage taxes. A 2008 poll of New York State residents found that 52% support a soda tax, rising to 72% when the revenue would be dedicated to programs to prevent obesity in children and adults. How the issue is framed is essential, with highest support when the tax is introduced in the context of promoting health and the revenues earmarked for child nutrition or obesity prevention programs.
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Conclusions
The federal government, a number of states and cities, and some countries (e.g., Mexico8) are considering taxes on sugar-sweetened beverages. The reasons to proceed are compelling. The science base linking sugar-sweetened beverage consumption with risk for chronic diseases is clear. Escalating health care costs and the rising burden of diseases related to poor diet create an urgent need for solutions, thus justifying government’s right to recoup costs.
As with any public health intervention, the precise impact of a tax cannot be known until it is implemented and studied, but research to date suggests strong positive effects on reducing consumption.5, 33, 34 In addition, the tax has the potential to generate substantial revenue to prevent obesity and address other external costs resulting from SSB consumption, as well as fund other health-related programs. Much as tobacco taxes are routine at both state and federal levels because of revenue generation and the public health benefit on smoking rates, we believe taxes on beverages that help drive the obesity epidemic should and will become routine.