Soda Tax v.s. Corn Syrup Subsidy

In a new study published in the Archives of Internal Medicine, researchers have concluded that imposing higher taxes on soda and other sweetened beverages will:

  1. Generate a lot of money for government
  2. Have minimal effect on weight loss for the middle class and,
  3. Have almost no weight loss effect on either those consumers in the highest and lowest income brackets.

Regarding the tax income side of the equation, the researchers estimated that if the federal government were to impose a sales tax that raised the price of sugar sweetended beverages (SSBs) purchased by 20 percent, this would generate about $1.5 billion per year in tax revenue in the U.S.;

If they imposed a tax that raised prices by 40 percent, this would generate $2.5 billion per year, at a cost to the average household of about $28.

And what would America’s soda drinkers get for their $1.5 to $2.5 billion?

According to Dr. Finkelstein et al, results of the study showed that due to the high likelihood of consumers switching from SSBs to other beverages, the effect on total calories consumed would be negligible.

A tax that raises SSB prices by 20 percent generates a daily average reduction of 6.9 calories. Over the course of a year, this equates to a weight loss of no more than 0.7 pounds per household member.

A 40 percent tax would reduce daily calories by 12.5 calories and generate annual weight losses of up to 1.3 pounds per person per year.

The researchers also found that nearly all of the weight losses were generated from middle income groups.

“Higher income groups can afford to pay the tax so they are unaffected, and lower income groups likely avoid the effects of the tax by purchasing generic versions, waiting for sales, buying in bulk, or by other cost-saving strategies,” Finkelstein said.

However, he notes that there may be a secondary benefit of the tax, even for lower income households, if the revenue is used to fund obesity prevention efforts.

Hmmmm, now that may be an idea.

The tax itself may be ineffective in reducing obesity, but if it funds more effective weight loss programs, we may be on to something.

Of course, it still means a new federal tax of between $1.5 and $2.5 billion.

And no one likes new taxes.

But, what if instead of a new tax, the government were to reduce/eliminate the subsidies they give to the farming industry which cause the price of high fructose corn syrup and traditional sugar to be artificially low?

And what if they took all of that corn syrup/sugar subsidy money and redirected it towards healthier food choices and public parks and walkable neighborhoods and public school phys ed programs and…?

What we would/could end up with is:

  • Soda being sold at fair market prices
  • Junk food being sold at fair market prices
  • Healthy food being sold at artificially lowered prices
  • Greater access to healthy lifestyle choices
  • More livable neighborhoods
  • Healthier children
  • Reduced national obesity
  • and No New Taxes

So, what do you think?

Soda taxes or a repeal/reduction of the pro-junk food agriculture subsidies?





  1. Taxing soda may help our better nutrition and benefit our teen age people, but will they do the same for other things like candy, ice cream and fried foods?


  2. …and who decides what is healthy and what isn’t?

    I agree, it’s not a simple argument. And for everyone who is afraid of a “big brother” making decisions about what they eat, you should realize that it is already happening. But like the Wizard, all the manipulations are done behind the curtain. At least slapping a tax on soda would be done in plain view of the taxpayer

  3. We already spend billions on the Dept. of Agriculture and its Food Pyramid education program. Has that cured obesity? No. Do Americans eat more fruits and vegetables, as the Food Pyramid advises? No. I was part of a focus group a couple years ago and heard many of the arguments in favor of taxing soda and sweetened drinks. The researchers kept leaving the room to consults with those watching behind the glass because our group wasn’t buying their arguments. If people want to change what people drink,they need to make better choices as consumers. The market will respond accordingly. Sweet tea has become very popular at restaurants, which is not a better alternative, but many restaurants are now offering freshly-brewed UNsweetened iced tea as an alternative, a beverage with zero calories and loaded with antioxidants. Restaurants love it because it’s more profitable and there are fewer problems that carbonated drink machines. The market made that happen, not a tax or fee imposed by the government.

  4. We should do both. The study may have overlooked the benefit of general awareness, which would likely have a higher caloric benefit per year (the more people know about negatives of soda the more that will stop buying; because it’s a tax increase everyone will know) but also lower the revenue side of the equation. On the subsidy side, this seems to be a no brainer but still requires strong leadership because of all the lobbyist.

  5. Great, great piece. I agree with you 100%. Although, I kind of like both taxes on soda AND doing away with the subsidies.

    There is something extremely wrong when a six ounce container of organic rapsberries costs twice as much as a pound of beef or 4 liters of soda.

    There is so much wrong with our food system that it is scary.

    I will say, I personally support a tax on “junk” food. I view it just like I do the tax on cigarettes. If you are going to partipate in an activity that has “known” risks that ultimately we all pay for in the form of higher health care etc, then let’s try it. I am not sure the higher tax on cigarettes has kept anyone from buying them…but it does help to offset the cost for the rest of us.

    Soda is cheap enough, that even a 50% increase will probably not deter many people…seriously. And if it does, good.

    I agree with Kirk, that the tax may also raise awareness. I am not sure people think soda is good for them, but I am not sure they realize how crappy it really is. Of course, then we have to consider some of the other crappy stuff like sweetened apple juice etc. They can be just as bad. And also what about diet sodas. While they don’t have added sugar, I am personally convinced they are part of the problem in terms of our decreased sensitivity to sweet.

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