Should we Tax People for Their Own Good?

Five years ago, the World Health Organization suggested that taxing soda and sugary drinks would lower consumption and reduce obesity, type 2 diabetes and tooth decay. Now there is evidence that they may have been correct.

A recent study published in JAMA Pediatrics showed that one year after Philadelphia passed its beverage tax, sales of sugary and artificially sweetened beverages dropped by 38 percent in chain food retailers, according to Penn Medicine researchers who conducted one of the largest studies examining the impacts of a beverage tax.

On January 1, 2017, Philadelphia became the second city in the United States to implement a tax on the distribution of sugary and artificially sweetened beverages (Berkeley, California was the first). The goal of the 1.5 cent per ounce tax (18 cents on a typical 12 ounce can of soda) was to generate revenue to support universal pre-K, community schools, and improvements to parks and recreation centers, with the potential side benefit of curbing consumption of unhealthy drinks.

“Taxing sugar-sweetened beverages is one of the most effective policy strategies to reduce the purchase of these unhealthy drinks. It is a public health no-brainer and a policy win-win,” said study author Christina Roberto, an assistant professor of Medical Ethics & Health Policy in the Perelman School of Medicine at the University of Pennsylvania. “It’s likely to improve the long-term health of Philadelphians, while generating revenue for education programs in the city of Philadelphia.”

I am generally not a fan of taxing individuals to alter their behavior, but we have a long history of doing so - cigarettes, alcohol, etc. An argument can certainly be made that those who drink a lot of sugary beverages are being asked to shoulder a tax burden to support schools and public spaces that others are not. But one might also argue that their consumption exacts a pubic cost, since our insurance premiums end up paying for the negative health consequences these people bring on themselves. And I suppose from a freedom of choice point of view it is better than banning such products.

How do you feel about using taxes to "motivate" people to make choices that are better for their own health?