Many people are beginning to wrap their minds around the House Republicans’ proposed destination-based cash-flow tax and what it means for tax reform. Most people are still looking into the tax’s impacts on trade and how...
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- New Op-Ed in U.S. News & World Report on Soda Taxes
New Op-Ed in U.S. News & World Report on Soda Taxes
This November, three California cities and Boulder, Colorado are set to vote on ballot initiatives that would impose hefty local excise taxes on soda and other sugar-sweetened beverages. My colleague Morgan Scarboro and I have an op-ed in U.S. News & World Report today about how these proposals are unlikely to deliver on the promises proponents of these taxes make. From the op-ed:
As the Tax Foundation notes in a 2012 report, a 10 percent soda tax could burden high income families by $24.29, while poor families would be harmed nearly twice that amount at $47.38. WHO has proposed a tax twice that size, and some U.S. cities have proposed or enacted rates several orders of magnitude larger. This year, the city of Philadelphia, for example, enacted a tax of 1.5 cents per ounce of liquid, which could increase the price of a two-liter bottle of soda by a stratospheric 102 percent and intensify this regressive effect.
There is also the important question of whether or not soda taxes actually make people healthier. Supporters of the taxes tout evidence that they lower soda consumption, which is entirely expected, as increasing the price of doing something often means people do it less.
But what isn't as obvious is that consumers might purchase less soda, but do so in favor of other high-calorie drinks. A 2010 study found that a percentage point increase in taxes on soda would lead people to switch to milk, consuming an average of eight additional calories per day, leaving them worse off.
Another 2012 study from Cornell University indicates that many soda drinkers will even switch to beer in the face of a soda tax hike, meaning consumers are simply swapping one public health no-no for another.
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