taxes

Soda Taxes: a Failed Experiment that Needs to End

Sin taxes are placed on goods based on the notion that increasing the price will discourage individual behaviors perceived as having negative effects on society. These taxes raise revenue to offset the supposed public costs of the supposedly harmful products being taxed, or to fund other government programs. In a survey of 8,000 households done before and after implementation of the soda tax, researchers at the Mexico Autonomous Institute of Technology (ITAM) found that those in the lowest socioeconomic strata were least likely to reduce soda purchases in response to the price increase. Those with the least amount of money are paying a greater proportion of the soda tax. Sin taxes have unpredictable effects on consumer behavior, as well as unintended consequences. Despite the best intentions of public health advocates pushing for a soda tax, the real-world effects of sin taxes on foods have been universally lackluster. Experience shows they disadvantage those least able to absorb the cost, without measurably improving public health. It is time to discontinue this failed experiment.

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