Vermont Soda Tax Bill Resurrected

March 4, 2013

I was recently up in Vermont testifying about H. 234, a bill that would put a $1.28 per gallon tax on soda. Beer, by contrast, is taxed at $0.27 per gallon in Vermont. In my last post on the progress of the bill, I noted that it was killed in the Vermont Health Care committee, ostensibly because one of the expected “yay” votes (who is a doctor) was unable to attend the vote because a medical emergency had called him away. The Huffington Post reports that this was actually a political ploy though:

In a phone interview with The Huffington Post Thursday, [Rep. George] Till said he understood why everyone assumed he'd been pulled away by work — but admitted that he had actually missed the vote on purpose, as a "purely political maneuver."

Till explained that prior to Friday's scheduled vote, several of his fellow committee members had expressed their intention to vote against the soda tax because of minor, budget-related provisions elsewhere in the bill. Till knew that he could count on getting the six "yes" votes the bill would have need to pass last week. But he feared sending the soda tax bill to the Ways and Means committee with a 6-5 vote would imply lukewarm support for the issue, guaranteeing its failure down the road. Till had sponsored soda tax bills in the previous two session of the Vermont House, only to see both fail, and he wanted this one to have the best possible chance of succeeding, he said.

He made a motion to reconsider this week, the bill passed the Health Care committee 7-2, and now it is awaiting a vote from the Ways and Means committee. Till reasons:

"I'm a physician, so I look at this as a health care bill," Till told HuffPost. "If we don't start doing something to fight obesity now, it's going to crush us down the line. Sugar-sweetened beverage taxes have a unique impact on obesity; it's clearly the most rational first step. I thought the message out of the policy committee should be a strong endorsement of that."

But this is ultimately a tax bill, which means that we need an economic understanding of how the tax would affect consumption behavior. In that regard, the economic literature is not on Till’s side. A 2010 study showed that adolescents consumed less soda when it was taxed, but they just substituted in the same amount of lost calories from other sources. A 2012 study showed that consumers that drink beer were particularly likely to switch to beer when soda was taxed. This resulted in almost 2,000 more calories consumed on net each month—not exactly a desirable outcome if your goal is trimming waistlines.

I think my takeaway from this literature is that nutrition is made up of complex choices that are personal to each individual. The tax code, by contrast, is a blunt tool with one lever, so it is not particularly well-suited to dealing with obesity.

Finally, as for obesity “crushing us down the line,” it looks like we are already turning the corner on obesity, with the most recent research showing that rates are dropping in many cities across the country.

For my testimony in Vermont, click here.

Follow Scott Drenkard on Twitter @ScottDrenkard.

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