Young and Hungry

The Tax on Sodas Starts This Fall, But Will It Work?

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The D.C. Council didn't exactly pass a soda tax, but it did the next best thing: It extended the 6 percent sales tax on, as D.C. Wire noted, "sodas and other 'non-alcoholic beverages with natural or artificial sweeteners.'"

Call it whatever you like, but sodas will be taxed starting Oct. 1. The main question, of course, remains unanswered: Will the tax have any effect on consumption and on childhood obesity? Apparently so, according to two studies pointed out by Marion Nestle over at the Atlantic Food Channel.

Nestle singles out a July 2010 U.S. Department of Agriculture analysis, a rather theoretical piece of research that came to these conclusions based on a 20 percent  price increase to "caloric sweetened beverages":

  • A tax-induced 20-percent increase in the price of caloric sweetened beverages could reduce net calorie intake from all beverages by 37 calories per day for the average adult. The effects for children were estimated to be larger — an average reduction of 43 calories per day.
  • By assuming that 1 pound of body fat has about 3,500 calories, and assuming all else remains equal, the daily calorie reductions would translate into an average reduction of 3.8 pounds over a year for adults and 4.5 pounds over a year for children.
  • The weight loss induced by the tax could reduce the overweight prevalence among adults from 66.9 to 62.4 percent and the prevalence of obesity from 33.4 to 30.4 percent. For children, the at-risk-of-overweight prevalence would decline from 32.2 to 27.0 percent and the overweight prevalence would decline from 16.6 to 13.7 percent.

Nestle also directs our attention to a more concrete study by Harvard researchers who implemented a five-phase plan to see what method, if any, would affect soft drink consumption at the Brigham and Women’s Hospital cafeteria in Boston. The study's abstract spells out the details:

Methods. We implemented a 5-phase intervention at the Brigham and Women’s Hospital cafeteria in Boston, Massachusetts. After posting existing prices of regular and diet soft drinks and water during baseline, we imposed several interventions in series: a price increase of 35% on regular soft drinks, a reversion to baseline prices (washout), an educational campaign, and a combination price and educational period. We collected data from a comparison site, Beth Israel Deaconess Hospital, also in Boston, for the final 3 phases.

Results. Sales of regular soft drinks declined by 26% during the price increase phase. This reduction in sales persisted throughout the study period, with an additional decline of 18% during the combination phase compared with the washout period. Education had no independent effect on sales. Analysis of the comparison site showed no change in regular soft drink sales during the study period.

Interestingly enough, both of these research tools were based on much higher price increases than a 6 percent sales tax. Makes me wonder what kind of effect D.C.'s soda tax will have on consumption.

Photo by Poolie via Flickr Creative Commons, Attribution License

  • Scott

    This wont achieve anything more than putting a nickle in the city's bank account for every can of coke sold.

  • Ed Bruske

    The is a significant difference between the "soda tax" that was originally proposed and the compromise measure of applying the 6 percent sales tax to soft drinks that was actually adopted. That is, the "soda tax" would have increased the price of soft drinks on the shelf. The sales tax only shows up when the purchase is rung up at the cash register. In terms of consumer behavior--whether they will be deterred if they see higher prices on the shelf, as opposed to a stealth sales tax--the difference can be a game-changer. Likewise, you can't compare D.C.'s new sales tax on soft drinks with the price hikes used as purchase deterrents in the studies being cited here.

  • Tim Carman

    A good and fair point, Ed. Thanks for chiming in.


  • Rick Mangus

    This is just another nanny state tax, like the bag tax but you suckers keep voting these people back into office, how pathetic!

  • American Beverage

    As you say above, the City Council did pass a sales tax on soft drinks – not an excise or “sin tax.”

    Taxes don’t make people healthier. In fact, last year the Mercatus Center at George Mason University published a paper on soda taxes, breaking down the idea with common sense analysis and research. The report found that even a 20 percent tax increase on soft drinks would decrease the BMI of an obese person by just 0.02. That’s an amount not even measurable on a bathroom scale.

    Recent tax proposals in a handful of states and cities across the country have less to do with public health and more to do with budget shortfalls. In fact, a recent Rasmussen poll found that more than half of Americans are opposed to sin taxes, and 73 percent believe that sin taxes are created to raise money for government – not help public health.

    Singling out one product as the cause of a complex health issue like obesity defies science and common sense. The beverage industry supports comprehensive solutions that will have meaningful and lasting impact like our School Beverage Guidelines which remove full-calorie soft drinks from schools and replace them with more lower-calorie, nutritious, smaller-portion beverage options, and our Clear on Calories calorie labeling initiative that will make calorie information available to consumers at their fingertips.

    The fact remains that taxes are not the solution to a problem as complex as obesity. A balanced diet and regular exercise are the most effective ways to combat obesity and maintain a healthy lifestyle. For more information, visit

    - American Beverage Association

  • Ed Bruske

    The beverage industry has absolutely no defense. Sugar, including high-fructose corn syrup and other sweetners, are killing Americans by the millions. They are probably the single most important source of obesity and a host of other metabolic diseases: diabetes, hypertension, atherosclerosis. And the single biggest source of sugar in the American diet is sodas. Obesity is not so complex as the beverage industry would like you to believe. We could almost solve it overnight if we removed sugar from the diet. Cutting back on soda consumption would take us a long way toward that goal. Sodas are the new tobacco. The beverage industry doesn't want to hear it, but they are the scourge of America's health problems.