In The Blogs

Sugar, Sugar

Is Congress really considering a tax on sugary sodas as part of the funding mechanism for national healthcare?  Ezra Klein says yes!  The Wall Street Journal, however, which has a big piece about soda taxes in today's paper, doesn't muster up a ton of evidence.  Here it is:

Senior staff members for some Democratic senators at the center of the effort to craft health-care legislation are weighing the idea behind closed doors, Senate aides said.

That's it?  Color me unimpressed so far.

In any case, this whole thing is ridiculous.  The issue here is highly caloric sweeteners, not soda per se.  In other words, high fructose corn syrup, which is what virtually everyone uses to sweeten their drinks these days.  So why on earth would we tax Pepsi at a penny an ounce at the same time that we massively subsidize HFCS?  And even if we got rid of the subsidies, which would be a fine idea in any case, why tax soda?  If this is the direction we want to go, why not just tax sugar and HFCS directly, regardless of what it goes into?

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kevin, who gives a sh*t?

kevin, who gives a sh*t? it's POP/soda.....who cares?

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Finger on the pulse

If you don't foresee the populist uprising that will rally against having to pay more of soda, you probably haven't been to a regular grocery store lately. Whole Foods might have you hypnotized with all their juice and such, but my local Publix dedicates an aisle and a half to sodas. Add in the HFCS packed "juice drinks" and a good 5% of my local supermarket (which is a microcosm of my local food economy) is dedicated to "just POP/soda"

This isn't just a political non-starter, it's a millstone to carry us to the bottom of the ocean.

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Idiotic

The nanny state mentality drives me crazy when it comes to the left. Sure, go ahead, tax sugary...but where do we stop? Fast food? Sugary cereals? Candy?

You're right--at least if you tax High Fructose Corn Syrup, you get at the root of the problem. But frankly, I find this a ridiculous way to pay for health care, particularly since you're disproportionately taxing people who don't have access to fresh food and farmer's markets--or even grocery stores in many food deserts. There's gotta be a better way to fund health care.

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I would think a carbon tax

I would think a carbon tax should nail high fructose corn syrup.... But I'm not sure about cap and trade.

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HCFS

HCFS is just a cheap way to get sugar/fructose. Corn is "cheap" because of subsidies we give farmers to grow corn. It'd be easier to remove subsidies and allow the market to price corn accordingly. HCFS would then get more expensive - perhaps hitting fatties in the wallet (can you say "poverty diet"?)

Don't expect it to last, though - smart food scientists will find another cheap source of fructose if corn gets too expensive - maybe switchgrass or something...

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Kevin -- it's easy for you

Kevin -- it's easy for you to call for a tax on HFCS from the confines of the Ivory Tower, but I think we both know the real best option here is a cap-and-trade for total caloric production.

Trippp

My state taxes pop and soda.

MN exempts food and clothing from our state sales tax, and I like that.

Candy and soda pop are taxed, though. I wonder where we draw the line. Do we consider apple juice to be a food? It has as much sugar as pop does.

I dunno.

Tripp

Trippp

The sub for fructose is sucrose

rusrus,

The whole thing is complicated. We could remove the subsidies for corn and also remove the tariffs on foreign sugar, but politically the domestic sugar beet producers would oppose any loss of profit.

What a tangled web we weave when we mess with taxes and subsidies.

Tripp

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Get to the root of the issue

Trippp >"...What a tangled web we weave when we mess with taxes and subsidies."

If we actually desired The Market to work "as advertised" we would cease using Monopoly Money currencies (dollars, euros, yen etc) as our yard stick(s) and replace them with a reality based monetary structure. One with NO externalities allowed.

I won't be holding my breath while waiting for this to occur.

"If you don't deal with reality, reality will deal with you" - C.J. Campbell

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I don't see why we shouldn't

I don't see why we shouldn't just tax calories. You could then send a rebate check out for the equivalent of 2600 calories a year to combat regressiveness concerns. Most importantly, you could just levy the tax upstream at the ingredient level.

I'd love to see something like that implemented, for the simple reason that it would give restaurants and food processors an incentive to cut calories at the margin. For example, Burger King executives would realize that their company could save a ton of money if customers had to explicitly ask for mayo to be on their whoppers. Restaurants would offer diet sprite or club soda as a soda option (Where as of now, I've yet to find an affordable place that offers either).

It's not so about being paternalistic! There is surprisingly strong amount of econometric evidence that people tend to pick up the eating habits of those around them(And I'm not talking about assortive mixing, "Fat people hang out with fat people". It's been shown that "The mere presence of fat people tends to make people around them fat". Moreover, food choices are highly path dependent. Afterall, there's a reason why French and German people eat so differently, despite the fact that the two countries have similar resources and economic wealth.

Even a very small calorie tax could do a lot to change the "default" eating habits of the American people, without depriving them of the freedom to actually eat fatty foods if they so desired or increasing food prices.

RobertWaldmann

2 birds one stone

Replace the current ethanol subsidy with a subsidy limited to ethanol produced from high fructose corn syrup. Drive up the price by buying it from farmers. Set the famers against the fatteners.

All that is obvious, but once you have done all that explain to me why Ezra Klein isn't advocating this.

MarkH

Where are these tax ideas coming from?

Is it Republicans who suggest these things in closed rooms and then claim the Dems are trying to tax us all to death? Geez Louise, enough with the taxes already!!!!

Health care is costing us double what it should. There's enough money going to it already. It has to pay for itself.

If there was any justice we'd get back quite a few percentage points of GDP for NOT hacking them into little pieces and feeding them to the Wall St. bankers.

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The administration is

The administration is already trying to move $1 Billion from ag substitutes to school food improvements. I think we need to see more of that. We probably need more like $10 B to get quality food into schools - and that would go pretty far in getting healthier food to low income kids.

But a soda tax... I'm mixed. Highly regressive. But the behavior studies show that people will reduce consumption. I think on a whole, I'd rather not see more taxes that are regressive.

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