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Singling Out One Product For Taxation To Solve Obesity is An Ineffective Approach

April 1, 2010

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Singling Out One Product For Taxation to Solve Obesity is An Ineffective Approach

Taxes Don't Make People Healthier

WASHINGTON, D.C. - A study published today in the journal Health Affairs provides further evidence that, when it comes to reducing obesity, excise taxes on sugar-sweetened beverages will have no noticeable impact. Although the authors speculate that substantial taxes may reduce consumption and weight gain among select groups, even their own findings undermine that hypothesis and counter the fallacy that singling out one set of products will make a significant impact on a challenge as complex as childhood obesity.

The fact remains that taxes don't make people healthier - a balanced diet and exercise do that. A report by researchers from the Mercatus Center at George Mason University showed that even a 20 percent tax hike on a soft drink would decrease Body Mass Index (BMI) for an obese person by just 0.02, an amount not even measurable on a bathroom scale. It is also worth noting that the RAND analysis found no significant link between the consumption of soda or weight gain among children and differential taxes on sodas compared with other foods, further showing that soda taxes would be ineffective.

"We understand that governments are facing tough budget challenges," Susan K. Neely, president and CEO of the American Beverage Association (ABA), said. "But singling out one item for taxation completely misses the mark in having an effect on the national challenge of obesity."

Science shows that singling out a food or beverage won't make a dent in obesity. The RAND analysis itself highlights the fallacy that targeting one product for taxation will reduce obesity. In fact, the analysis confirms that many factors impact the complex issues of overweight and obesity, including things such as sedentary lifestyles and genetics.

It's also important to keep in perspective the relatively small percentage of calories that come from beverages. Sugar-sweetened beverages, including soda, contribute only 5.5 percent of the calories in the American diet, according to a National Cancer Institute analysis of government data presented to the U.S. Dietary Guidelines Advisory Committee just last year. That means that more than 94 percent of calories come from other sources.

"The effectiveness of a soft drink tax, if anything, would be trivial," Neely said. "A tax doesn't even qualify as a good start to addressing the rising rates of obesity. We need to move beyond these simplistic ideas and pursue comprehensive, meaningful solutions from all aspects of society if we're really going to reverse childhood obesity. Our industry is certainly stepping up to do its part."

With its School Beverage Guidelines, the beverage industry has removed full-calorie soft drinks from all schools and provided for more lower-calorie, nutritious, smaller-portion beverage choices. As a result of the guidelines, there has been an 88 percent reduction in calories in beverages shipped to schools since 2004.

The beverage industry's commitment to provide its consumers with nutrition information extends beyond the school environment. In fact, in support of First Lady Michelle Obama's "Let's Move" campaign, the beverage industry recently announced it will make the calories in its products even more clear and consumer-friendly. Beginning this summer, America's leading beverage companies will put the information on the front of all their packages, as well as company-controlled vending machines and fountain machines.

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The American Beverage Association is the trade association representing the broad spectrum of companies that manufacture and distribute non-alcoholic beverages in the United States.

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