These stark numbers have led local public health advocates to propose a substantial tax on sweetened beverages such as soda, iced tea and sports drinks in the District. The logic is simple: Sweetened drinks are the biggest source of the added sugar Americans consume. Make those drinks more expensive — more reflective of the costs their consumption exacts on people and on society, in the form of health-care costs and lost productivity — and consumption will decline. This was the thinking behind hiking taxes on cigarettes, extremely addictive products that Americans turned away from as increasingly aggressive taxes caused their prices to rise.
A majority of D.C. Council members have embraced the idea, endorsing a bill that would slap an excise tax of 1.5 cents per ounce on drinks that use “natural common sweeteners” — so, Coca-Cola and Gatorade, but not diet soda or 100 percent orange juice. The excise tax would raise sticker prices, rather than be levied at the register, which would do more to change consumer behavior than the 2 percent sales tax on soda the District recently enacted. The new tax would hike the price of a two-liter bottle of soda by about $1.
Public health advocates cite studies showing that similar taxes in places such as Berkeley, Calif., Philadelphia and Mexico have driven down sugary drink consumption. In Philadelphia, the example most similar to the District, a tax of a similar size resulted in a decline in sugary drink sales of some 20 to 40 percent.
Some people, of course, will cross city lines to avoid paying the tax, as happened in Philadelphia. It is also not proven that declines in sugary drink consumption translate into cuts in obesity rates. Researchers say soda taxes are too recent a policy innovation for such effects to yet be measured. Economists worry that the effect will be modest, as, for example, some consumers substitute candy bars for soda.
A better solution would be a general tax on sugar, which would encourage people to reduce consumption of sugary foods and drinks in proportion to their health effects and eliminate the risk that people will simply switch from soda to candy. But, barring that, a tax that cuts sugary drink consumption by a fifth would still be a public health win. An added benefit is that money raised would go toward public health programs in the areas the tax would most affect.