Soda Taxes are Highly Regressive and Not Too Effective at Reducing Obesity
July 1, 2009
The National Center for Policy Analysis summarized recent studies on the effect of soda taxes:
- Increasing the soft drink tax by 55 percentage points would decrease the obese and overweight population by only 0.7 percentage points.
- That means a 27.5 cent tax on a 50 cent can of soda would only lower the number of the obese and overweight from 66 percent to 65.3 percent of the population.
Such excise taxes are also highly regressive:
- On average, the bottom fifth of income earners spend 1.7 percent of their gross income on alcoholic beverages compared to 0.6 percent for the top 20 percent.
- They spend 2.5 percent of income on tobacco products versus 0.2 percent for the top 20 percent.
- They spend 9.9 percent on gasoline and motor oil compared to 2.3 percent for the top 20 percent.
See their full report here.
More on excise taxes here.