Wednesday, September 3, 2014

OMG This is What Happened When an Anti-Fat Tax Was Introduced as a Test

Joseph J. Thorndike writes at Tax Analysts:
I’m no fan of anti-obesity taxes, whether they target soda, candy bars, or any other junk food. They are regressive and arbitrary, not to mention paternalistic and condescending. Supporters have all sorts of genuine good intentions. But ultimately, these taxes are simply an unfair money grab dressed up as a public health initiative.

Now we have some evidence that they may be ineffective, too. Four experts at Cornell University have shown that taxes on calorie-dense foods might fail to achieve their key goals, including a reduction in calorie intake and improvements in diet quality. (They might still, however, manage to raise some cash.)

In an effort to assess whether anti-fat taxes can actually do their job, the authors conducted a controlled field experiment in three grocery stories, introducing a 10 percent tax on sugar-sweetened beverages. If you’re interested in the details, by all means take a look. Ultimately, however, their observations were not encouraging for fans of anti-obesity taxes (at least as they are usually conceived).

Two problems emerged in the study. First, while the tax did curb purchases of calorie-dense drinks initially, consumers eventually went back to their old habits; the authors found no significant reduction in soft drink purchases at the three-month or six-month mark. Second, the authors found that some people who scaled back their sugary soda actually ramped up their beer drinking.

“Taxes on less healthy foods may not succeed in reducing soft drink consumption or in reducing calorie consumption,” the authors concluded. “Of greater concern is that such a tax may encourage an increased consumption of alcohol among some households.”

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