There's one thing on which nearly everyone can agree: The overconsumption of soda and sugar-sweetened drinks is harmful to our health, especially for kids. That's why New York state's budget measure to tax those drinks is a win for public health.
Gov. David Paterson of New York dropped a similar proposal last year after the bill garnered little support among lawmakers and received a lot of pushback from the beverage industry. This year, a new and improved effort that is part of Paterson's upcoming budget has a better shot. Still, many state senators, and some unions, oppose the tax. They say that touting it as a measure to curb obesity is just an excuse to tax. "This year, my rule is I'm not voting for any new taxes. None at all, at any time," state Sen. Joseph Robach told News 10 in New York.
The measure would raise nearly half a million dollars and as much as $1 billion per year after that, all of which would go directly to the state's Department of Health. Because the measure is part of the budget, it has to be taken up by the Legislature. It's not a separate bill that can just be left to die. Lawmakers would have to come up with alternative revenues or cuts to offset the loss if the proposal is jettisoned -- a tough proposition given the existing $9 billion budget gap. New York City Mayor Michael Bloomberg spoke in favor of the initiative last weekend and praised it as a simple step to raise money and help curb obesity.
What makes this proposal different from previous efforts is that it taxes the sugars producers use to sweeten drinks, not the drinks themselves. While producers will likely pass those added costs on to consumers, the tax gets at the root of problem. It's not the beverages themselves; it's what is inside them. And consumers can't always immediately tell the difference between a natural fruit drink and one that has added corn syrup or sweetner. The tax would also help address the reason producers use those syrups, especially corn syrup, in the first place; they're made artificially cheap by our subsidies to corn growers. Getting rid of the subsidies would be easier, but that will take years and a concerted federal effort to fix. New York's proposed tax is a local solution that puts human health first.
The sugar tax is the latest in a string of policies to rethink nutrition in America in order to address the ever-growing health-care costs of obesity and concomitant health problems. New York state spends $7.5 billion a year to treat obesity-related health problems. While the ways in which we measure obesity are still inexact, the research about sugary drinks and what they do to health are unambiguous.
Increasingly, policy-makers see the food-production system as the source of the problem. New York, especially New York City under the Bloomberg administration, has taken the lead in cracking down on producers in the name of public health. In 2006, the city banned trans fats in restaurant foods. In 2008, it began requiring chain restaurants to post nutrition information on their menus so consumers could make informed choices about the calories they consume. And in January, it proposed limiting the sodium in packaged foods. Since New York City is such a big market, health advocates hope these restrictions will affect the rest of the country, too.
Former President Bill Clinton has announced that, working with beverage producers, many New York City schools have almost eliminated soft drinks and fruit drinks with added sugar, leaving only low-fat milk, real fruit juices, and bottled water. That's important, because children consume roughly half their daily calories during the school day, but what about the stop at the bodega on their way home? That's where advocates hope a new sugar tax would come in.
Paterson's previous proposal would have taxed soda at a higher rate than it is currently proposed, about 18 percent, and shoppers would have found out the price when they checked out. Paterson's new measure would initiate an excise tax on the concentrated syrups that produce a drink with more than 10 calories per 8 ounces. (It excludes drinks with more than 70 percent fruit juice.)
Thomas Frieden, the director of the Centers for Disease Control and Prevention, writing with his colleague Kelly Brownell in The New England Journal of Medicine last year, argued that the evidence was mounting for a tax on sugary beverages. "It is difficult to imagine producing behavior change of this magnitude through education alone, even if government devoted massive resources to the task," he wrote.
A sugar tax would also probably encourage people to consume less. A study from Buffalo, New York, published this month in the journal Psychological Science, showed that taxing foods with low nutritional value but lots of calories, like junk food and sodas, reduced overall calories purchased. It worked better than decreasing the price of fresh fruits and vegetables, because reducing the price of healthy food simply freed up more money to spend on food overall. In general, studies show that when the price of soda goes up, consumption goes down, though they vary on how much. Moreover, New York state would use the revenue to pay for health care for lower-income residents.
Normally, projects like this are hit with accusations that the government is imposing its will on free choice or that it is adversely affecting poor people, who would be disproportionately hit with the tax. To the first point, the government is already influencing consumer choice, because corn subsidies make the price of drinks that are sweetened with corn syrup artificially cheap. The same Buffalo study showed that the price of fresh fruits and vegetables rose about 190 percent compared to the consumer price index in the last 30 years. Soft drinks have only risen in price by 70 percent in the same time period. To Daines, making soft drinks more expensive corrects what he calls a market mistake.
That's why it is easier to get behind a tax like this than it might be to get behind other food taxes, which are usually regressive because lower-income families spend a larger percentage of their budget on food. Sugary drinks are not a necessity, and letting them stay at artificially low prices sends the signal that they are a perfectly reasonable food to buy. That masks their true costs, including the non-monetary costs of obesity and being unhealthy. And because the research shows that shoppers purchase fewer sweetened drinks when prices rise, families on limited budgets might spend less on sweet drinks overall.
Letting New York state take the lead on this will be better than trying to corral federal lawmakers to approve such a tax, Daines says. Too many Midwestern corn-producing states have an interest in a big market for corn syrup, and Coca-Cola, based in Georgia, is a powerful lobby. If New York implements the sugar tax, other progressive states and cities will follow, until it's adopted almost universally, he says. "And everyone will say, 'Why didn't you do it 10 years ago? Why did it take so long?'"