Improved Health Through Taxation

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If you haven’t heard there are proposals for a tax on sodas. This “sugar” tax is similar to the various tobacco taxes. From experience with taxing tobacco it is pretty clear that taxation reduces usage. The taxes would lead to price increases in all sodas and, potentially, other sugary soft drinks.

Rise in Soda Prices Linked To Better Health

An article on price-usage correlation for tobacco

Tax Essential Facts

So we increase the price, reduce consumption and we see an improvement in health. Sounds like a good thing, right? I don’t know. I’m split on this.

Here’s what I like about this.

  1. The taxes will reduce consumption. This is great. Fewer people drinking soda, and those drinking soda drinking less. Fantastic!
  2. Tax revenue can go toward treating those that continue to consume. Like a portion of the tobacco tax revenue going toward lung cancer research and treating those with cigarette inflicted bronchial problems it eases the burden of these folks choices on the rest of us. If you’re going to do something inherently unhealthy, you should pay for the consequences.
  3. It is another indication that soda is a bad thing. It’s tough to continue to argue that consuming soda is ok when the US government is taxing it in an effort to reduce consumption, and taxing it to pay for treatment of soda inflicted illness. The US governments health recommendations are not always in our best interest, but they certainly can sway public opinion.
  4. It increases the consumer price on one of the cheapest drinks available. Businesses love soda sales because they are so profitable. Production cost is negligible and depending on the situation businesses can see thousands of percent margins on the stuff. The taxes would help curb that.

Here’s what I don’t like about this idea.

  1. I find it disturbing that people will continue to consume something (tobacco, soda, etc) regardless of how often they are told they are killing themselves, but once you increase the price by a few percent, they will reduce consumption. I guess money is more important than life.
  2. Personal responsibility shouldn’t be legislated. If someone wants to do damage to themselves, we should let them (barring psychological problems). The trick is ensuring that the rest of us don’t have to pay for the aftermath.

All in all this is an interesting concept. It seems taxation works better than prohibition, so let’s make soda cost $4 for a 12oz can.

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