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Report Promotes Soda Taxes for World Health

POSTED ON Feb. 8, 2019

Taxes on unhealthy foods — and the political support required to implement them — have important roles to play in the fight against several global pandemics, according to a Lancet Commission report.

“Obesity, undernutrition, and climate change represent three of the gravest threats to human health and survival,” according to the January 27 report. The three pandemics are collectively termed a “global syndemic,” because of their common societal influences and temporal and geographical coincidence. The report features case studies of health taxes that have already been implemented in some jurisdictions. 

The report recommends strengthening feedback loops that preserve the environment and limit the dissemination of unhealthy food. Carbon pricing and food taxes are among the recommended measures, as are water levies, and environmental and nutritional food labels. Taxes, subsidies, and education can also help bolster demand for healthy food, it says. 

“Paying the true costs of petrol and meat will increase their costs and reduce consumption,” the report says. An increased number of taxes on sugary drinks, which have been enacted in over 30 jurisdictions worldwide, is an encouraging sign of government intervention, the report says. 

Not everyone would agree. Soda taxes and other Pigovian health taxes often meet vehement resistance from interest groups, industries, and the public, wherever they are proposed. They are blamed for job losses, black markets, cross-border shopping, and regressivity, among other ills. In July 2018 Philadelphia’s 1.5-cent-per-ounce soda tax survived legal action by a group of retailers, consumers, and industry representatives, who claimed the tax duplicates the state sales and use tax on tangible personal property. 

The report cites Mexico’s experience as key to understanding the costs of implementing measures to prevent obesity. Mexico launched a campaign against obesity in 2013 that has included educational, healthcare, and fiscal measures. The country implemented taxes on sugary drinks and high-calorie foods in January 2014, and its efforts have been described by the OECD as “one of the most comprehensive government strategies to address the [obesity] problem.” But while evidence suggests that Mexico’s sugar tax has reduced soda purchases, some have noted that its effect on obesity is unclear. 

The report acknowledges that obesity is on the rise worldwide and that “no country has successfully reversed its epidemic because the systemic and institutional drivers of obesity remain largely unabated.” Mexico’s soda tax is just part of a collection of health measures the country has implemented, which includes school meal standards, nutrition labels, and limits on junk food advertising, the report says. “An investment of $1 billion from philanthropic and other sources could plausibly support 100 countries to apply Mexico’s approach to hasten the global implementation of recommended food and nutrition policies,” it says. 

But the report adds that “efforts by the food and beverage companies substantially weakened the marketing and front-of package labeling system," which impaired Mexico's anti-obesity measures.

In a quasi-regulatory approach, the U.K. government has set targets “to reduce total sugar volumes sold by food category,” the report says. This kind of approach can help, but should be supported by a willingness on the government’s part to implement stronger measures if industry responses aren’t sufficient, it says. The United Kingdom also implemented a soft drink tax in April 2018.

But the best example is Chile, where three-quarters of the population is overweight and political commitment to a regulatory approach “has seen a step change in international best practice for a combined portfolio of food labeling, taxation, and regulation of marketing,” the report says. “The hallmark of Chile’s progress is its political leadership,” it adds, praising the commitment of Sen. Guido Giradi and comparing the country’s progress to that of New York City under the leadership of former mayor Michael Bloomberg. 

Acknowledging the perception of soda and meat taxes as regressive, the report recommends earmarking tax revenue for programs in low-income communities. Taxes on sugary drinks or junk food have “greater health gains for those with less income through larger gains in health-related behaviors,” it asserts. 

Attempts to target the syndemic at the global level might be unsuccessful without more support, the report warns. But “as with other social movements, such as for tobacco control and sugary drinks taxes, efforts to address the global syndemic are more likely to begin at the community, city, or state level,” it says. President Trump may have pulled out of the Paris Agreement on climate change, but “2,700 leaders from U.S. cities, states, and businesses representing 159 million people and $6.2 trillion in GDP have continued efforts to mitigate greenhouse gas emissions,” it says.