The Case for the Health Taxes

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The politics of soda has changed pretty radically. Just a decade ago, virtually no countries or cities had a tax on sugar-sweetened beverages.

Then Mexico enacted a substantial tax in 2014, and it started a trend. Soda taxes now exist in India, the United Arab Emirates and Saudi Arabia. A tax will go into effect this year or next year in South Africa, Britain and Ireland. In the United States, Philadelphia, Oakland, San Francisco and Seattle are among the cities that have such a tax.

The argument for these taxes is compelling. Sweetened beverages are the single largest contributor to the obesity epidemic, scientists say, and that epidemic exacts a big toll, in both health problems and medical costs.

Soda taxes are modeled on tobacco taxes, which have been hugely successful in reducing smoking and improving public health. But even tobacco taxes are still not high enough, as the economist Robert H. Frank explained recently. And taxes on soda could do far more good if they were higher and more widespread.

Today, Mike Bloomberg, the former New York mayor, and Larry Summers, the former Treasury secretary, are announcing a new global group to advocate for these kinds of taxes. I think of them as “health taxes,” and they can also cover alcohol and forms of sugar beyond soda. The group includes the president of Uruguay and the former prime minister of New Zealand, as well as leaders from Britain, China and Nigeria.

When I spoke with Bloomberg and Summers this week, they said they were well aware of the tricky politics of these taxes. Some people are skeptical of having the government favor one kind of behavior over another, while others worry that taxes on soda, alcohol and tobacco predominately hurt the poor.

But Bloomberg argues that government has a duty to promote public health — and that obesity and the use of tobacco and alcohol are three big, and preventable, public-health problems. They are a large part of the reason that, for the first time in history, noncommunicable diseases now kill more people than communicable diseases. It’s also clear that these taxes work: They reduce consumption, which means they don’t overburden the budgets of poor families.

“I think this is about as close to free-lunch, win-win policy as economists have found,” Summers said.

The new group will eventually make recommendations on both the politics and policy of health taxes. What are the right tax levels? How should the taxes be different in different places? Should the tax revenue pay for health programs, education or something else? How can advocates avoid setbacks like the recent one in Cook County, Ill., which scrapped a soda tax (partly because of local distrust over how the money would be used)?

I would guess that some readers of this newsletter aren’t completely comfortable with taxing sweeteners. But the overconsumption of sugar really does cause tremendous damage, and we can still have enjoyable eating habits but with far less sugar.

“Generally, I think sugar is where tobacco was in 1973,” Summers says. “We’ve recognized how serious it is as a public health problem. There are initiatives, and the tide is rolling in. But it takes a long time.”

If you’re interested in more details, I’ve written columns about the history of alcohol taxes and soda taxes.

In The Times. The print version of today’s editorial page doesn’t look the way it normally does. In place of the usual essays written by the editorial board, the page is filled with letters from supporters of President Trump.

“The Times editorial board has been sharply critical of the Trump presidency, on grounds of policy and personal conduct,” the introduction reads. “In the spirit of open debate, and in hopes of helping readers who agree with us better understand the views of those who don’t, we wanted to let Mr. Trump’s supporters make their best case for him as the first year of his presidency approaches its close.”