Taxing Soda: Bad Economics; Bad - The American Spectator | USA News and Politics
Taxing Soda: Bad Economics; Bad

Veronique de Rugy argues in Reason that soda taxes fail on economic grounds. Such taxes won’t improve soda drinkers’ health, because people will substitute other harmful drinks once soda becomes more expensive. And they won’t raise revenues, because if you tax soda fewer people will buy it. de Rugy presents empirical evidence that shows this to be the case.

I think that sin taxes, whether they be on soda or cigarettes, are unethical even if you put economic considerations aside. The reason that legislators frame the debate in economic terms (de Rugy presents a study that suggests that a “penny-per-ounce tax on sugared beverages could lead the average consumer to reduce soda consumption by about 10 percent and lose two pounds’) is that there are social welfare considerations: if we’re extending free health care to everyone or paying for Medicaid, we should monitor public health and prevent the uninformed, unwashed masses from taking on stupid health risks like smoking or drinking Coke. Those activities impose costs on the rest of us, responsible taxpayers.

I think the argument is ridiculous, and discriminatory. Smoking and drinking too much soda are not the pastime of the well-to-do. One look at the world around you reveals that smokers are generally working class, and soda drinkers are working class kids (or at least those who drink soda in harmful quantities are). But it’s not like there are not activities that only the rich indulge in that pose health risks. For example, you don’t see too many poor folks skiing. Yet skiing is a risky business that poses significant health risks to skiiers, and by extension skiing burdens the rest of us with health care costs. Why don’t you hear about MDs, economists, and politicians trying to levy sin taxes on skiiers?

If you want to make an argument for sin taxes on moral grounds — smoking is bad for you — then fine. But otherwise let’s end this discrimination under the guise of public health and health economics, and let the smokers smoke and the kids drink Coke.

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