The Impact of Soda Taxes
Sales would remain strong with a modest tax (wikimedia)
Via Ezra Klein, a RAND study of the impact of price changes on body-mass index indicates a modest impact. The implications for a soda tax? Ezra says “whether or not soda taxes are a good idea for raising revenue, they’re not likely to do a tremendous amount to change the national waistline.”
I’m not too saddened by the result, because as I’ve been saying the right way to think of public health taxes is as a revenue measure:
Think about the case for taxing income, via the income tax and FICA. Why do it? Well, to get the money. That’s how we finance Social Security, the Department of Defense, Medicare, interest payments on the national debt, Medicaid, federal aid to schools, veterans’ health care and benefits, the FBI, etc. Now what’s the case against taxing people’s income? Well, it’s that it discourages work and it discourages investment. And that’s bad for the economy. Now we go back and forth over whether any given expenditure has a value that outweighs the economic costs. Liberals, like me, tend to think that a relatively high level of expenditure is justified whereas folks on the right tend to disagree.
But what if we could raise some revenue by taxing something else? Like, say, cigarettes. Or soda. Or booze. Well, then the case for doing the taxing remains similar—you can fund useful programs with it. But the case against looks a lot weaker, since reducing consumption of cigarettes or soda is not so bad. You introducing a little bit of allocative distortion into the economy, but not a huge amount, and you’re improving public health which is going to be beneficial.
It’s worth recalling that if it somehow were the case that a modest soda tax led to plummeting soda sales, that a modest soda tax then wouldn’t work as a revenue measure. The point about the benefit of raising money from a soda tax isn’t that the decline in consumption would be giant, it’s that a marginal reduction in soda consumption wouldn’t be problematic in the way that some other responses to taxation might be. The tax would be somewhat regressive, but if it was used to finance Medicaid expansion and subsidies for health insurance that would more than offset the impact.
64 Responses to “The Impact of Soda Taxes”
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July 8th, 2009 at 12:18 pm
As noted on his site, this is a study of an overall increase in food prices, not on unhealthy foods.
July 8th, 2009 at 12:20 pm
I wish peoople were paying more attention to this argument. It is a very good one, in my opinion.
July 8th, 2009 at 12:24 pm
“The point about the benefit of raising money from a soda tax isn’t that the decline in consumption would be giant, it’s that a marginal reduction in soda consumption wouldn’t be problematic in the way that some other responses to taxation might be.”
You should read another recent post from Ezra which contains some authentic wisdom on the topic:
If you want to raise revenue, then do something like a VAT that will be nondiscriminatory. Don’t use the tax code to start micro-targeting your own consumer preferences.
If it’s really about revenue, leave it being about revenue.
If it’s actually about changing behavior, don’t sell it as revenue.
Matthew may like playing the moral scold, but I don’t want the Democrats to be the political party of moral scolding.
July 8th, 2009 at 12:26 pm
The tax would be somewhat regressive, but if it was used to finance Medicaid expansion and subsidies for health insurance that would more than offset the impact.
Actually, that wouldn’t necessarily offset the regressive impact, if you account for only the part of the subsidies actually funded by the tax.
Generally, I think Matt is way too quick to wave away objections to regressive taxation. But I have also given up hope that he is going to reconsider his attitudes on this subject.
July 8th, 2009 at 12:29 pm
By the way, I think a progressive income tax or progressive consumption tax are obviously the best choices for increasing revenue (or closing regressive loopholes and ending regressive subsidies, and so on). However, I can see the case for these “luxury” taxes if the alternative would be something like a broader-based regressive sales tax–at least to some extent they are “voluntary” taxes in comparison.
July 8th, 2009 at 12:30 pm
Just raise the income tax, for chrissake. If the poor have enough money to pay for their medical expenses through a regressive tax, then they have enough money to pay for it in the first place!
July 8th, 2009 at 12:31 pm
I’m not sure it’s even accurate to describe the tax as regressive. Poor people *that don’t change their behavior* would pay more tax as a fraction of their income, but sodas are a luxury good that anyone is free to stop consuming if they think it costs too much. Nothing prevents poor people from switching to Kool-Aid or water (not the yuppie bottled kind, but municipal tap water, which you can cheaply put in reusable containers) and paying none of this tax whatsoever.
That doesn’t really seem on par with, say, gasoline tax, which it’s hard to avoid paying while remaining employed.
July 8th, 2009 at 12:39 pm
chris, if people stop drinking soda then the soda tax is no longer a viable revenue source, and now you have to look for something else. If you want a consumption tax that raises revenue and doesn’t hurt the poor and middle class, tax a luxury item like gold or yachts or DC prostitutes.
July 8th, 2009 at 12:39 pm
Your arguments have a couple severe flaws that a truck could be driven through. First of all, income taxes, especially those on the middle class, don’t really fund all of those things you claim they do except maybe the interest on the national debt. Income taxes only make up about 30% of the federal budget, the same amount that the budget has increased since about 10 years ago (going by last year’s figures, this year’s will be astronomically more). Corporate taxes fund most of the rest.
I would be more in favor of taxes on “bad” things, like sodas, alcohol, cigarettes, IPods, etc., than a tax on income, just for the reasons you state (taxes discourage whatever is being taxed, and why would we want to discourage income?) Ostensibly, these “sin” taxes are meant to discourage whatever sin is being taxed. However, if they are a primary source of revenue (as cigarette taxes are federally for the SCHIP expansion for kids, for example) it puts the government in a position where it makes money off people doing these bad things, and so is profiting off them at the same time it is theoretically supposed to be encouraging people to stop them- a conflict of interest if there ever was one! If politicians are getting re-elected based on continuing cigarette tax revenues, they will not take steps to encourage people to quit smoking.
July 8th, 2009 at 12:41 pm
Yes, that’s exactly how public insurance plans work.
And I’m not too keen on a pop tax either, but one way to spin it could be as a backhanded means of recapturing some of that government revenue blown on subsidizing overproduction of high fructose corn syrup. I’d rather stop throwing subsidies down the ADM shithole in the first place, but that’s a political non-starter with the disproportionate influence the Senate grants to corn-growing states.
Meanwhile, the Serious Centrists would never consider hiking the income tax to pay for a public plan, but allowing them to join in Republican contempt for the poor and their filthy junk food habits is a depressingly plausible approach.
July 8th, 2009 at 12:43 pm
I’m tired of people claiming the income tax is a disincentive to work. If I’m laying on my butt all day because the interest on my wealth more than covers the expense of living comfortably, then I’ve got a huge disincentive to work. If, however, a good part of that income is taxed, suddenly I have incentive to gain some more income somehow in order to maintain the standard of living I prefer.
July 8th, 2009 at 12:49 pm
he tax would be somewhat regressive, but if it was used to finance Medicaid expansion and subsidies for health insurance that would more than offset the impact.
This is kind of dumb. The tax and the spending are separate items. A progressive tax and progressive spending is better than a regressive tax and progressive spending. Now, maybe a regressive tax is justified by factors that are inherent to the tax – such a public health benefits. But that seems not to be the case here.
Seems to me that, if one cares about progressivity, a tax on millionaires to fund health care is a better option than a soda tax to fund health care. Since there does not seem to be any contravailing public health reason to prefer a soda tax to a millionaires tax, I am not sure why Matthew prefers the more regressive option. Except that this is just part and parcel of liberals’ general authoritarian instinct to control everything that our society does.
July 8th, 2009 at 12:54 pm
Income taxes only make up about 30% of the federal budget. . . . Corporate taxes fund most of the rest.
Yikes, this is ill-informed. Actually, individual income taxes make up about 46% of federal revenues. Next are social insurance taxes, which make up about 36%. Corporate income taxes are only 12%. See Table 1-2 here (2008 actual numbers):
CBO Budget Analysis
July 8th, 2009 at 12:57 pm
I never thought I’d say this, but Libertarian Girl is right.
All the same, if a soda tax is high enough (say, $5 a can), nothing a revenue-hungry politician can do will get people to buy it on a regular basis. Of course, if the price of legal soda is prohibitively high people will just start making their own or buying it on the black market.
July 8th, 2009 at 12:59 pm
chris,
I obviously agree that if the alternative is a broader-based sales tax, a “luxury” tax is better. Still, I think it should be noted that even within luxury taxes, there are more and less regressive possible taxes.
July 8th, 2009 at 1:07 pm
How about we hold off on those consumption taxes until we increase the 15% rate on carried interest for hedge funds and institute a transaction tax on stock trades?
July 8th, 2009 at 1:07 pm
If politicians are getting re-elected based on continuing cigarette tax revenues, they will not take steps to encourage people to quit smoking.
Leaving aside the fact that a tax is, itself, usually a fairly big discouragement, this surprises me as a rather non-libertarian critique. We shouldn’t have sin taxes, because really the government should be doing even more things to regulate personal behaviors?
Count me in with the group that finds this uncomfortably intrusive. I don’t like this any more than if they decided to tax music, video games, non-PG movies (or heck – any movies. You should be outside, young man!), or anything else that might be deemed objectionable and cause some barely-justified (or barely quantified) public harm.
July 8th, 2009 at 1:08 pm
If you want to raise revenue, then do something like a VAT that will be nondiscriminatory. Don’t use the tax code to start micro-targeting your own consumer preferences.
If it’s really about revenue, leave it being about revenue.
If it’s actually about changing behavior, don’t sell it as revenue.
Matthew may like playing the moral scold, but I don’t want the Democrats to be the political party of moral scolding.
This.
July 8th, 2009 at 1:10 pm
As a conservative, this is one of the few economic issues that I agree with you on. I also think that taxes on cookies, cakes, candy, and other cheap and unhealthy foods would be a good idea. The only stipulation I have is that the government should use these taxes as a way to slowly substitute the income tax, not compliment it. If policy makers can get creative and find ways to implement enough indirect taxes to significantly cut the income tax without sacrificing too much revenue, I think our country would be better off.
(And because I’m leaving myself open for it, I’ll make it clear that I’m against the “Fair Tax.” A 20% price increase on all goods is worse than a 20% income tax.)
July 8th, 2009 at 1:12 pm
Petey is the voice of wisdom on this issue. There, I said it.
However, the world is not turned completely upside down. Someone calling themselves “Libertarian Girl” is copying and pasting false economic statistics. Good to know that some things never change.
July 8th, 2009 at 1:13 pm
Count me in with the group that finds this uncomfortably intrusive. I don’t like this any more than if they decided to tax music, video games, non-PG movies (or heck – any movies. You should be outside, young man!), or anything else that might be deemed objectionable and cause some barely-justified (or barely quantified) public harm.
It’s a little intrusive, but it’s not the same as trying to outright ban or discourage the use of a product. The fact is we need revenue, and it’s better to tax things that people want but don’t need, like soda and video games, than what they do need, like their income.
July 8th, 2009 at 1:17 pm
Matt, your argument is ridiculous.
We tax to pay for benefits.
Who benefits most from laws which protect private property? People who own a lot of it. They pay the most property tax.
The people who benefit most from medicare and Social Security are the ones who will eventually receive it. They pay.
Who benefits most from a capitalist system? The people who earn the most. They pay the most to maintain that system.
(While people on public assistance clearly don’t pay taxes to run it, keeping them mollified is of great value to those who do pay.)
What are sin taxes supposed to accomplish? If you’re trying to compensate society for future medical expenses, you should hit all the sins. Add to the gas tax to pay for the care of those in car accidents. Fine people for not washing their hands frequently during flu season. Tax people who don’t eat a balanced diet. Tax unprotected sex – not only does VD cost money, so does pregnancy.
Even if you’re just trying to compensate for obesity care, taxing soda is stupid. Where is the evidence that soda is the primary culprit. Shouldn’t you also tax “juice” (ingredients: water, high fructose corn syrup, artificial flavors, contains less than 2% pear juice).
You can’t really stop at taxing all added sweeteners. You’d need to tax fatty foods, too. Bleached white flour might even be a bigger contributer to obesity than added sweeteners.
You’d have to tax heating and air conditioning. People burn about 80% of their calories just to maintain their body temperature. By staying in perfectly regulated environments, they are burning fewer calories, and increasing their likelihood of being obese. In addition, being in sealed environments, like most modern office buildings, increases chances of invfection.
People who work at sedentary jobs, like blogging. are more likely to be obese. I guess they have to pay a tax, too.
Sin taxes, if you’re not comprehensively and accurately assessing every sin, are just a way of isolating a group and saying, “Hey, we outnumber them! Let’s take their money!”
July 8th, 2009 at 1:18 pm
I’m not a tax guy, but why not tax products containing high fructose corn syrup instead of just soda? Consumption probably will not drop much and that would broaden the tax base (and presumambly increase revenues) substantially.
July 8th, 2009 at 1:25 pm
It’s funny to read the posts accusing Matt of being a moral scold when he already stated clearly that his posture was simply about raising revenue and the relative political ease of levying sin taxes versus other types of tax.
I don’t buy the argument that income taxation reduces incentive, either, at least at moderate tax levels (and we’re pretty low). Making a higher income means bringing more money home at all tax levels, and everyone realizes this, and people will work damn hard to bring more money home. Any tax distorts the economy to some small extent in terms of tax-avoidance behavbiors, but that’s not an argument not to tax income.
July 8th, 2009 at 1:28 pm
I think a very vigorous tax on soda is a very good idea. Right now, soda is making the nation (especially the lower classes) obese and the results are horrifying. I think a soda price, at the vending, of say something like $2-3 per can would be a very good disincentive.
And another great thing to tax would be chips. If the vending-machine price would be raised to say, $3 and the supermarket prices raised according, the disincentive effect should be great.
July 8th, 2009 at 1:30 pm
I’m not a tax guy, but why not tax products containing high fructose corn syrup instead of just soda
Why not just end corn subsidies altogether? These products would basically tax themselves, and the benefit would extend to consumers who choose to buy “juice” instead of soda without being aware of how bad for them it really is.
July 8th, 2009 at 1:33 pm
I’m not a tax guy, but why not tax products containing high fructose corn syrup instead of just soda? Consumption probably will not drop much and that would broaden the tax base (and presumambly increase revenues) substantially.
High fructose syrup is actually only a fraction of the costs of making pops. Thus, while the results of say, a 200% tax on soda would be dramatic ($1 to $3), the effect of a fructose tax would not be so. It’s always more directly effective to tax the end product.
And frankly, the progressivity argument is completely bunk. We are talking about not some necessary part of life for the poor here; we are talking about poison. That’s why we subsidize milk; because milk is healthy and necessary. I frankly think we should subsidize milk and cheese to perhaps a greater extent, and punitively tax soda and chips.
July 8th, 2009 at 1:59 pm
In addition to regressiveness and other qualms raised above, I’d be a little concerned about having the government be revenue dependent on harmful products. Will they try to reduce the behavior or increase revenue? My bet’s on the latter, to the detriment of the country’s health policies.
July 8th, 2009 at 2:01 pm
The tax would be extremly regressive, not somewhat….. To create revenues, that tax is the most stupid idear ever. Either it works considering consumption reduction of unhealthy food or not.
July 8th, 2009 at 2:03 pm
How are we defining “soda” for taxation purposes? High fructose corn syrup + carbonation?
July 8th, 2009 at 2:09 pm
Sin taxes, if you’re not comprehensively and accurately assessing every sin, are just a way of isolating a group and saying, “Hey, we outnumber them! Let’s take their money!”
I agree with Njorl. It’s just a regressive tax on politically weak groups. The honest working poor get pleasure from soda. If you take away their pleasure, you’re just adding stress which is unhealthy.
July 8th, 2009 at 2:13 pm
Myles SG @27: High fructose syrup is actually only a fraction of the costs of making pops. Thus, while the results of say, a 200% tax on soda would be dramatic ($1 to $3), the effect of a fructose tax would not be so. It’s always more directly effective to tax the end product.
The reason a high-fructose corn syrup (HFCS) tax makes sense rather than a tax on the end product is that soda is unhealthy because of HFCS. Soda minus HFCS is just flavored bubbly water, which is harmless.
Now, I think AB in Berlin and Myles SG are both right in that corn subsidies should be ended and that unhealthful products like soda should be more heavily taxed, but the most direct and precise way to promote better nutrition through the tax code is simply to tax unhealthful ingredients, like HFCS and hydrogenated oils. Ideally there would be an independent nutrition board that would attempt to determine the cost to society of harmful food ingredients and set the tax accordingly, but implementing Pigovian food taxes even by a lobby-vulnerable Congress would be better than not implementing them at all.
As for subsidizing milk and cheese–we’re already doing that in a sense by subsidizing the feedstocks. Of course, those subsidies ought to go, but still, the healthfulness of cheese is hardly uncontroversial.
July 8th, 2009 at 2:18 pm
Njorl: Taxes should not work that way. The goal of taxation should be to acquire the revenue with the minimum amount of pain possible, not to simply pettily take from those who benefit. Progressive taxes advance this goal because of decreasing marginal value of money, and Pigouvian taxes advance this goal because they cancel out their own harm by reducing pain elsewhere. There are times where having the benefactees pay can advance this goal, (say, to prevent market distortions or whatever) but it’s not an end in itself. The goal of government should be to provide the maximum benefit at the minimum cost, and sometimes that means good old fashioned redistribution of wealth.
July 8th, 2009 at 2:25 pm
Poptarts @31: I agree with Njorl. It’s just a regressive tax on politically weak groups. The honest working poor get pleasure from soda. If you take away their pleasure, you’re just adding stress which is unhealthy.
Is there any evidence that the working poor get greater pleasure from soda than from juice, or iced tea, or generic Martinelli’s? And don’t trot out any of that “revealed preference” bullshit.
And if we’re concerned about people’s stress levels, there are hundreds of things to worry about (like, you know, anxiety over losing one’s job, not having money to pay for needed healthcare, …, being able to make next month’s mortgage payment, security against crime, …, whether the bus will get you to work on time, …, etc.) before we start worrying that people will not be able to afford soda as much anymore and will have to make due with juice or iced tea.
July 8th, 2009 at 2:29 pm
I am a huge drinker of DIET sodas. Now I realize that diet soda is not good for you but, as I understand it, the only serious health issue is with people who have can’t digest phenylanine.
Would the tax be on soda? Would the tax be on sugar? Does anyone really think this has a chance of passage?
July 8th, 2009 at 2:34 pm
For god’s sakes, we are talking about people who are drinking themselves to disgusting, unsightly obesity, not your “honest working classes” who spend their weekends tending to their lawns or whatever.
A number of my friends have parents who work as specialized tradesmen (carpenters, etc.) and they are the absolutely healthiest people I know. They are the ones who go off work and then head to the tennis court, or off to the biking trail, rather than lounging about with pop and chips. I envy them.
Let’s not confuse the working class with disgusting human beings. That is quite a stretch of association. It is pure libel.
July 8th, 2009 at 2:35 pm
And a high fructose tax would only increase soda prices by at most dimes; the ingredients would remain the same and the (slight) rise in costs passed to the consumer, with little change in behaviour.
July 8th, 2009 at 2:38 pm
Let’s not confuse the working class with disgusting human beings. That is quite a stretch of association. It is pure libel.
Dude, Myles, obese people are not “disgusting human beings”. Get a grip.
July 8th, 2009 at 2:48 pm
I like the idea of ending corn subsidies… It’ll never happen for various reasons, but I’d love a “Fat Tax” with the revenue used to subsidize fruit and vegetable production along with healthcare. A one cent tax per gram of fat (hell, a half-cent or less) could raise ridiculous revenue.
Anyways, I lived in Alaska for a time, and while I was there Double Quarter Pounder w/ cheese cost less than an orange. Nuff said.
July 8th, 2009 at 2:49 pm
And a high fructose tax would only increase soda prices by at most dimes; the ingredients would remain the same and the (slight) rise in costs passed to the consumer, with little change in behaviour.
Well, that obviously depends on the level of the tax. If soda is truly the blight that you say it is, then the level of the tax should be quite high–high enough to make up for the damage it causes society. As for whether a price increase of dimes would affect behavior, the RAND study MY links to gives some evidence that it would.
And the RAND study just looks at changes in price of calories generally–not the changes in the price of a readily substitutable good. If soda goes from being 75 cents a can to a dollar, but fruit juice or iced tea stays the same, then people are likely to switch away from soda to the healthier options. It’s not like gasoline where a 33% price increase just has to be eaten by the consumer, since there usually isn’t a way they can substitute something else for gasoline and it’s hard to all of a sudden drive 25% less.
July 8th, 2009 at 2:58 pm
Why just soda? Why not hamburgers also?
July 8th, 2009 at 3:04 pm
There is an alternative: tax products with certain amounts of corn syrup based on the product price. So any product with more than a certain mg of corn syrup would get a 30% tax, or whatever. This would essentially be the same as a soda tax, only it would also apply to all other artificially sweetened foodstuffs.
July 8th, 2009 at 3:09 pm
This is frustrating.
One wonders why MY cannot see the danger in this: Let’s let the Federal Government pick and choose which activities are good and which are bad. Then have them tax the bad ones.
Really?
Progressives regularly–and correctly–took the GOP to task for supporting unrestricted executive power simply because a conservative was in charge.
Similarly, I think progressives need to think long and hard about allowing the federal government to define “sin” in a classic “sin tax” model.
See, sometimes the people in charge don’t care so much about whether you drink Dr. Pepper instead of tap water. Sometimes, if you can believe it, they care more about sins like reading the wrong thing, saying the wrong thing, or putting your pee-pee where it doesn’t belong. I know that’s hard to believe. But it’s true.
July 8th, 2009 at 3:13 pm
Myles:
Let’s not confuse the working class with disgusting human beings. That is quite a stretch of association. It is pure libel.
What, were you bullied by fatties when you were young? Why all the hate? Why you all up in my business?
July 8th, 2009 at 3:20 pm
Why just soda? Why not hamburgers also?
Indeed, why not. I certainly would have no objections to taxing hamburgers, as far as that is enforceable (I really don’t see how you can enforce something like that, especially at your neighbourhood cafe.)
Why all the hate?
Because obesity is aesthetically repellent and morally repulsive.
July 8th, 2009 at 3:20 pm
Juice:
And if we’re concerned about people’s stress levels, there are hundreds of things to worry about (like, you know, anxiety over losing one’s job, not having money to pay for needed healthcare, …, being able to make next month’s mortgage payment, security against crime, …, whether the bus will get you to work on time, …, etc.) before we start worrying that people will not be able to afford soda as much anymore and will have to make due with juice or iced tea.
My point exactly. They/we have all that to worry about and now their/our sodas are going to cost more? So bascially we’re getting a pay cut to add to our stress.
All this is is fascist health nuts spreading the gospel for our own good.
July 8th, 2009 at 3:44 pm
“Because obesity is aesthetically repellent and morally repulsive.”
Myles: So just to be clear, you are very comfortable having the federal government define which actions are aesthetically repellent and morally repulsive, then using its powers of taxation to bring them low.
Hmm. One wonders of Myles engages in anything that might be considered ugly or immoral.
Hope you go to church every Sunday, fella. Cause I sense a nonbeliever tax on the way. Unenforceable? Forget it. I can think of a few enforcement mechanisms right off the top of my head.
July 8th, 2009 at 3:44 pm
Now what’s the case against taxing people’s income? Well, it’s that it discourages work and it discourages investment. And that’s bad for the economy
Maybe I just missed the irony tags, but I don’t think so, I see some variation on this claim among younger progressives all the time. Somehow they have internalized the piece of Reaganomics.
I don’t know of any empirical evidence that suggests this key piece of supply side lore actually operates in practice. It really should just be tossed on the dust-bin of history along with the EMH and the ‘fully informed economic actor’. People just don’t operate in the clockwork fashion that these models assume.
A more plausible psychological model that better fits the historical and sociological evidence is that people work just hard enough to support a given level of consumption and otherwise resort to leisure. In that world higher taxes increase the marginal cost of that unit of consumption and so lead the consumer to work harder, longer or more intensely (i.e. through investment). On the other hand lower taxes lower the cost of that unit of consumption and so allow people to work slower, shorter or less intensely or perhaps to maintain the same level of work and simply increase consumption.
(A good study on this is “Theory of Peasant Economy” by Chayanov which studies work and consumption patterns over the peasant life-cycle. I found it explained the economics of medieval Britain (one of my fields) much better than other models)
Which model better fits the Reagan and Bush tax cuts? The one that says lower taxes mean more productivity from increased investment? Or the one that suggests that large tax cuts in marginal rates just encourages people to buy multiple houses at Vail and a big place in the Hamptons?
As I look around the proximate results of the Bush tax cuts was the rather obscene amount of conspicuous consumption among the multi-millionaires and billionaires among us over the last decade. What I am not seeing is a bunch of investment in productivity. Nor does it show in BLS productivity or wage tables.
In my opinion the whole ‘tax increases deter investment’ is just the self-serving cant of billionaires who in practice ‘invest’ in such things as $15,000 waste baskets and $20,000 shower curtains. That avowedly progressive people have swallowed it to the level that they want to solve everything through consumption taxes aimed at the poor and the middle class just boggles me.
Restore progressive taxation first and just ignore the “I’ll just take my ball and go home” rhetoric of the rich, it is not like there are a lot of places where they will still be able to maintain the same net consumption long-term. If we don’t raise enough revenue by restoring Clinton era top rates and taxing capital gains as regular income then fine, we can start examining VAT or soda taxes or other consumption taxes.
But for God’s sakes lets not get fooled by this piece of Voodoo Economics and tax everything BUT income first.
July 8th, 2009 at 3:48 pm
Because obesity is aesthetically repellent and morally repulsive.
Some people feel the same way as you do about gay people, should we tax them too?
Mind your own goddamn business, if you don’t like the sight of fat people then stay at home.
July 8th, 2009 at 3:49 pm
Hope you go to church every Sunday, fella. Cause I sense a nonbeliever tax on the way. Unenforceable? Forget it. I can think of a few enforcement mechanisms right off the top of my head.
Look up the origin, and the meaning, and the cardinal sin of the word gluttony.
Unsightly. Just absolutely, intolerably unsightly.
July 8th, 2009 at 3:51 pm
Unsightly. Just absolutely, intolerably unsightly.
Not nearly as intolerably unsightly as your smug self-righteousness. Get over yourself, and stay the hell out of other people’s business. You don’t have a right not to see fat people.
July 8th, 2009 at 3:53 pm
“Because obesity is aesthetically repellent and morally repulsive.” — Myles SG
Like you, Myles SG?
This is what taxing “sin” ultimately unleashes.
July 8th, 2009 at 4:01 pm
We need to factor in additional costs to government. Inevitably some will rebel against a soda tax. Then revenue agents will have to hunt down and find Pepsi and Sprite stills in the woods and destroy them. Of course the perps need found, arrested, tried and incarcerated. Seems the law of unintended consequences might come in to play here.
July 8th, 2009 at 4:04 pm
It’s a bit hilarious seeing people think aesthetically repellent can be a universal term of abuse, because unless you think wearing boat shoes and chinos makes one aesthetically repellent, then it is totally off-base.
July 8th, 2009 at 4:07 pm
Why not just end corn subsidies altogether? These products would basically tax themselves, and the benefit would extend to consumers who choose to buy “juice” instead of soda without being aware of how bad for them it really is.
You win the thread! This is exactly correct. There is high fructose corn syrup in juice. Do we tax this? Or ketchup? Why not just remove the corn subsidy that made all this cheap sugar in the first place?
July 8th, 2009 at 4:08 pm
A number of my friends have parents who work as specialized tradesmen (carpenters, etc.) and they are the absolutely healthiest people I know. They are the ones who go off work and then head to the tennis court, or off to the biking trail, rather than lounging about with pop and chips. I envy them.
Well get a job on a construction site.
I know an awful lot of people in the building trades and very few of them round out seven or eight hours of framing houses or reroofing with a few sets of tennis. It is more like going down to the tavern or bar and having a few beers and catching the baseball game. And yes if there are nachos or wings floating around they chow down on those. Because working on the job site means high caloric needs. But few of them match the description of ‘ripped’.
The fact that you don’t have friends working in these fields suggests either you live in a cloistered upper middle class environment or are a teen or both. Your clear disdain for what you probably think of as ‘fatties’ shows both an emotional immaturity and scant awareness of how weight has historically been treated.
There was a day within my lifetime, though probably not yours, when the mark of prosperity was a little paunch on you, a ‘pleasantly plump’ wife, and a fat baby. And that was here in the U.S. If you took your expressed attitude to the hard working people of Samoa they would look at you in disbelief.
The passion for ultra-fitness represented by such things as triathlons is a relatively new phenomenon, it is not as you seem to believe somewhere at the core of morality, it is just a new version of upper class snobbery hiding behind a concern for public health.
July 8th, 2009 at 4:12 pm
Rich kid supports regressive taxation, news at 11.
July 8th, 2009 at 4:22 pm
It’s amazing that Matt Y wants all these social services, but only if we get to tax the poor Americans to pay for it. After all, Matt Y doesn’t drink soda. Matt Y thinks people who drink soda are moral degenerates.
Sometimes, the fact that Matt Y has never been anything but a spoiled brat with a trust fund is incredibly obvious.
July 8th, 2009 at 4:58 pm
I agree with comment# 26 by AB in Berlin and Benny Lava in comment# 55 . Lets end the subsidies, but not have the government decide what we can and can not eat.
I don’t like it when conservatives tell people how to have sex.And i don’t like it when liberals tell people how to eat.
I am sorry, but i think that the American government has enough to worry about right now.
July 8th, 2009 at 5:24 pm
Hope you go to church every Sunday, fella. Cause I sense a nonbeliever tax on the way. Unenforceable? Forget it. I can think of a few enforcement mechanisms right off the top of my head.
The First Amendment says hi. I realize it’s been tortured a lot lately into allowing “faith-based initiatives” and similar bullshit, but this is one of the specific concerns mentioned in the Federalist Papers and Jefferson’s writings etc. because it was actually practiced in the countries the Founders were reacting against. Even Scalia wouldn’t stand for it. (Thomas, maybe. But fortunately there’s only one of him.)
We already have cigarette and alcohol taxes. That boat has sailed. The question is what else should be covered under the same umbrella (other than things like political/religious opinions, which are explicitly protected – and I would point out regarding your third example @43 that we already don’t have anything resembling strong protection of personal freedom in sexual matters).
I think that unhealthy-food taxation should be carried out at the ingredient level, but it’s also important not to be too specific. HFCS is bad for people’s health and there’s a reasonable case for a quasi-Pigovian tax on it.[*] But if the food industry responded by creating high glucose corn syrup, have we gained anything? Target simple sugars, fats (possibly differential treatment for saturated, trans unsaturated, and cis unsaturated), and sodium. Let the food industry innovate ways to make food appealing without those ingredients, and amend only if it becomes clear that the substitutes are just as bad. (If they’re not, of course, big win.)
And the threat of the revenue source disappearing is hollow, because that would mean that public health would improve, saving just as much or even more money in the long term. In any case that bridge can be crossed when we come to it.
[*] In the rational actor model it is of course unnecessary to tax self-destructive behavior because it is irrational and therefore can’t exist. This is why Pigovian taxes, strictly speaking, apply only to other-destructive behavior. But in the real world outside rational actor models, people sometimes behave in ways that harm their future selves, perhaps because the causality is obscure to them or because of time-inconsistent preferences. I therefore label a tax on a behavior that harms the behaver’s future self quasi-Pigovian (that is, it is Pigovian if you consider the present person and the future person as different people, which it seems the present person must be doing in order to engage in the behavior at all).
July 8th, 2009 at 5:26 pm
It isn’t your clothes he’s referring to – nor your weight, nor your personal hygeine.
July 8th, 2009 at 9:06 pm
[...] Yglesias makes an argument in favor of soda taxes that relies heavily on this deep, advanced governmental concept: Think about the case for taxing [...]
July 8th, 2009 at 10:36 pm
People will just switch too zero-calorie sodas, which taste okay once you get used to them.
And if they want to tax artificial sweeteners, well the government can try prying my Splenda from my cold, dead hands.
July 9th, 2009 at 1:37 pm
Re: Sometimes, if you can believe it, they care more about sins like reading the wrong thing, saying the wrong thing, or putting your pee-pee where it doesn’t belong.
If the state did more to dissuade people from reading “Lolita”, saying “N—-” or other Klansman terms, and sticking their pee-pee in that girl you just met at the nightclub half an hour ago, then we would be much better off. We wouldn’t have so much child molestation, so many racial hate crimes, or so many STDs.