Soda, Sin Taxes, and Regulatory Sins
In the Wealth of Nations, Adam Smith prescribed sin taxes, writing: "Sugar, rum, and tobacco are commodities which are nowhere necessaries of life, which are become objects of almost universal consumption, and which are therefore extremely proper subjects of taxation.” Free-market ideologists attribute excessive value to Smith's invisible hand metaphor but apparently never turned the pages to his reflections on sin taxes.
During recessions, states and the federal government reconsider sin taxes as regulatory mechanisms to address deficits and shape costly preferences, such as unhealthy habits. One popular form of sin taxes during the present recession is soda tax.
The New York Governor has been trying to pass soda tax in various forms, but failed each time. In the spring of 2010, Governor David Paterson proposed tax on sugary sodas and exempted diet beverages. Two coalitions of interest groups formed: the Alliance for Healthier New York and New Yorkers Against Unfair Taxes. The New York Times briefly documents how the New Yorkers Against Unfair Taxes derailed the proposed soda tax. Several New York politicians, led by State Senator Diane Savino, argue that the soda tax is "regressive." In a press release, entitled Senator Savino explained:
"The beverage tax is nothing more than a money grab. Instead of revisiting our regressive tax policies and wasteful spending, which have gotten us into the predicament we are in, this proposal is simply another way of increasing revenue on the backs of working families.” ("No to Regressive Beverage Tax," March 12, 2010).
At least one study shows that more than one in four adult New York City residents consumes one or more cans of sugar-sweetened soda per day. Consumption varies widely among demographic groups, with socially disadvantaged populations, who are most impacted by obesity, having the highest prevalence of frequent consumption. In other words, soda tax would be regressive because poor people drink more soda. See: Colin Rehm et al., Demographic and Behavioral Factors Associated with Daily Sugar-sweetened Soda Consumption in New York City Adults, Journal of Urban Health 85: 375-385 (2008).
The campaign materials of the Alliance for Healthier New York and New Yorkers Against Unfair Taxesspeak for themselves.
The Alliance for Healthier New York
Download Ad of the Alliance
Download Ad of the Coalition
During recessions, states and the federal government reconsider sin taxes as regulatory mechanisms to address deficits and shape costly preferences, such as unhealthy habits. One popular form of sin taxes during the present recession is soda tax.
The New York Governor has been trying to pass soda tax in various forms, but failed each time. In the spring of 2010, Governor David Paterson proposed tax on sugary sodas and exempted diet beverages. Two coalitions of interest groups formed: the Alliance for Healthier New York and New Yorkers Against Unfair Taxes. The New York Times briefly documents how the New Yorkers Against Unfair Taxes derailed the proposed soda tax. Several New York politicians, led by State Senator Diane Savino, argue that the soda tax is "regressive." In a press release, entitled Senator Savino explained:
"The beverage tax is nothing more than a money grab. Instead of revisiting our regressive tax policies and wasteful spending, which have gotten us into the predicament we are in, this proposal is simply another way of increasing revenue on the backs of working families.” ("No to Regressive Beverage Tax," March 12, 2010).
At least one study shows that more than one in four adult New York City residents consumes one or more cans of sugar-sweetened soda per day. Consumption varies widely among demographic groups, with socially disadvantaged populations, who are most impacted by obesity, having the highest prevalence of frequent consumption. In other words, soda tax would be regressive because poor people drink more soda. See: Colin Rehm et al., Demographic and Behavioral Factors Associated with Daily Sugar-sweetened Soda Consumption in New York City Adults, Journal of Urban Health 85: 375-385 (2008).
The campaign materials of the Alliance for Healthier New York and New Yorkers Against Unfair Taxesspeak for themselves.
The Alliance for Healthier New York
Download Ad of the Alliance
Download Ad of the Coalition
Posted by Barak Orbach at Monday, July 05. 2010 
Categories: Bounded Willpower, Social Regulation, Interest Groups, Objections to Regulation, Rent Seeking, Price Regulation, Preference Shaping, Sin Tax
Tags: Exemptions Soda Tax
Categories: Bounded Willpower, Social Regulation, Interest Groups, Objections to Regulation, Rent Seeking, Price Regulation, Preference Shaping, Sin Tax
Tags: Exemptions Soda Tax
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