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Thoughts on a Soda Tax

November 23rd, 2009 Leave a comment Go to comments

USCurrency_Federal_ReserveOne of the new ideas for hoovering money from my pockets that cash-starved governments are floating around is to tax soda and other sugary beverages (see this, this, or this for a sampling). Politicians are of course going out of their way to explain how this would be for my own good.This is normal when either a politician’s unending lust for my money is taking hold or they want to take away some of my rights. Whenever either of these is proposed, I can be sure that one of two reasons will be thrown out:

  1. “It’s for your own good.”
  2. “It’s for the children.”

That these are devoid of any real meaning and usually the final fallback argument of someone who has no real evidence or logic with which to work is besides the point. (Bonus points to Derrick Z. Jackson in the Boston Globe editorial [first link above] for working in both arguments. I especially loved the line, “This is now a wanton attack on the health of children” referring on Coke’s plans to grow sales.)

One argument for a soda tax is that the American obesity epidemic is in large part due to the consumption of soda. That’s bullshit. It’s based on the false correlation that soda consumption (per capita) has increased over the last 20 years and so has obesity. But correlation doesn’t imply causation, and even if it did, in this case, the data simply don’t support the argument.

In fact, based on industry consumption data [see second graph on page], and with billions of dollars at stake the beverage industry has much more incentive to get these trends right than public health agencies, carbonated soda consumption peaked in America in 1998 and has been declining for the last four years as bottled water eats into its market share. Yet obesity continues to rise.

Since the “increasing soda consumption causes people to get fat” argument doesn’t hold, people have started to go after the components of soda. It must be the high fructose corn syrup they argue. And I think they may be on to something – but not for the reasons they are proposing. High fructose corn syrup isn’t some magic fat juice. It’s a refined sugar that really isn’t that different from any other refined sugar. [Note: in the interest of disclosure, I found many of the following links on the High Fructose Corn Syrup trade association page at www.sweetsuprise.com, but that doesn't change the trustworthiness of the information. From what I can tell none of the cited research was in any way commissioned or funded by the corn syrup group.]

As registered dietician Becky Hand writes in a SparkPeople article (and she cites a bunch of sources as well):

Well, the body digests table sugar very rapidly. And both HFCS and table sugar (sucrose) enter the bloodstream as glucose and fructose—the metabolism of which is identical. There is no significant difference in the overall rate of absorption between table sugar and HFCS, which explains why these two sweeteners have the same effects on the body.

Want more? OK. The American Medical Association said in 2008:

After studying current research, the American Medical Association (AMA) today concluded that high fructose syrup does not appear to contribute more to obesity than other caloric sweeteners, but called for further independent research to be done on the health effects of high fructose syrup and other sweeteners.

And this cuts to the heart of the problem. High Fructose Corn Syrup isn’t more of a problem than other sugars. It’s the total consumption of sugar that is the issue. Americans eat too much. That’s why we’re fat.

And this is what really set me off on this debate. What really pisses me off is that Americans eat too much High Fructose Corn Syrup and too much fatty meat because the Government manipulates the market to make these things artificially cheap due to terrible import tariffs and ridiculous farm subsidies.

800px-Huge_field_in_Goshen_TownshipIn their documentary film King Corn, Ian Cheney and Curt Ellis graduate college and move to rural Iowa to grow an acre of corn. With no experience and no real knowledge they immediately qualify for $28 in Government subsidies for that acre. Startled by the implications of this they go exploring the large-scale food production chain in the US and see firsthand how the outrageous subsidies (ranging between $1.8 billion and $9.4 billion a year for corn alone; see this site for a breakdown through 2006) cause a glut of ultra-cheap corn on the US market and further subsidize the production of cheap beef and chicken and soda and a host of other processed and manufactured foods.

So on one hand the Government is taking my money to make cheap High Fructose Corn Syrup via farm subsidies and then on the other hand they’re telling me they have to tax my High Fructose Corn Syrup sweetened beverage because it’s bad for me. Talk about pissing on my head and then telling me it’s raining. How about they just stop paying giant factory corn farms billions of dollars a year and leave me alone. Take the $5 billion a year you’re doling out to corn farmers and put it towards health care. There — a budget neutral funding source.

Katherine Mangu-Ward wrote a great piece about this in early October. In it she concludes,

Rather than abolish corn subsidies and using that money to fund healthcare reform, Congress prefers to work at cross purposes with itself. The culture of logrolling (cob-rolling?) dictates that the farm-state senators get their subsidies and healthcare reformers get their tax. That way, everybody wins. Well, everybody except taxpayers, who get screwed coming and going.

She also wrote an Op-Ed in the Washington Post where she dispels five myths about soda taxes. It’s great stuff.

So that’s the real purpose of this rant and the thing that pisses me off the most. Many people I talk to have latched onto the idea that soda must be bad for you and that a “sin tax” on soda must be a good thing to protect the children and the fat people from themselves. But few have paid any attention at all to the farm policies that are the underlying cause. Double-taxing Americans on High Fructose Corn Syrup (once to subsidize the corn and artificially decrease the price, then again by taxing my soda to increase the price) isn’t the answer. Fixing the chronically broken farm policy in this country is.

And before people start writing nasty comments about how I must hate farmers, and how I must want them to be poor, I don’t. I grew up in a rural area of Pennsylvania and I knew a bunch of real family farmers. And most of them were broker than shit living in poverty. Why? Because the kind of small acreage farming done in Northeast Pennsylvania can’t compete with the highly subsidized thousand acre factory farms that can ship their cheap product into every regional market in the US. So, unable to compete on price with corn grown thousands of miles away most of the farmers I knew turned to small dairy operations which aren’t nearly as subsidized as corn farming is. And that’s yet another tragedy of our current farm policy. The subsidies have so distorted the market that only large, consolidated operations can thrive and the family farm has been destroyed along the way. One more in a long string of reasons to fix the farm policy.

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  1. Chris
    November 23rd, 2009 at 09:44 | #1

    Wow, you must REALLY hate farmers and want them to be poor! Ok, not really. What about diet soda? Will it be taxed? What about fruit juice that has HFCS added? If HFCS is the root of all food-borne evil, then shouldn’t every food that contains it be taxed under this policy? This is just nuts.

  2. Matt
    April 12th, 2010 at 12:45 | #2

    I can hardly agree with you, that farm subsidies are the cause of obesity and health issues. Subsidies were implemented to assist the farmer while keeping food prices down for society. The fact the Americans lack the ability to regulate their intake of food and soda, is each individual consumer’s fault. Society has its impact, such as our fast food chains and the developed norms, but really everything comes back to consumer control. Everyone looks for someone else to blame… I will agree with you the additional taxation of soda is a not a solution, but blaming isn’t either…

  3. April 12th, 2010 at 20:08 | #3

    @Matt
    Matt,

    Don’t think I said that farm subsidies are making people fat. In fact, about half way through the post I said this: “Americans eat too much. That’s why we’re fat.” Nothing about farm subsidies there.

    But to your point … arguing that farm subsidies are “keeping food prices down for society” misses half the point, and in important half at that. What farm subsidies do in fact is redistribute wealth just like any other subsidy program. In this case from wage-earning citizens and profit-earning corporations to farmers, the 50% of Americans who don’t pay income taxes but who buy food, and corporations like ethanol producers who benefit from the cheaper, subsidized commodities.

    A stronger argument could be made that inexpensive food is a strategic asset, but even if one believed that, the current subsidy program doesn’t really support that goal. What the current program does is distort the market for the benefit of a few well connected industries at the expense of others. For example, if cheap food and farm support were the real goal, wouldn’t it be more efficient to subsidize the means of production rather than the product itself? That way the market could dictate what is grown. By this I mean subsidizing fertilizers and diesel fuel and tractors, etc. Then farmers could decide what to grow, but it would all be cheaper. That might be a socialist program, but at least it would be market-based socialism.

    Instead, the current program is more akin to a centrally-planned (think Soviet, Chinese, or Cuban) agricultural policy where individual crops are targeted for resources based on the whims of lobbyists and politicians to the exclusion of market forces. For example, why is dent corn so heavily subsidized when it’s not even a direct human food product while there isn’t a single dollar of subsidy for spinach or broccoli, both of which are actually healthy for people to eat? Because large corporate interests with lobbyists benefit from cheap corn, that’s why.

    So, although I agree that it’s really individual’s responsibility to prevent their own obesity, I don’t think that the Government should be actively subverting that goal with a terrible, market-busting farm subsidy system that redistributes wealth to a few powerful interests.

    The current farm subsidy system needs to end now.

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