Are SSB taxes good or bad for the poor?

In an economic sense, the optimal soda tax is surprisingly high, even if one values economic redistribution and opposes "regressivity" in the tax system, according to a recent NBER working paper from Hunt Allcott, Benjamin Lockwood, and Dmitry Taubinsky.

The three economists recognize that sugar sweetened beverage (SSB) consumption may have a larger budget share for poor consumers than for rich consumers, but, somewhat offsetting this pattern, they consider the possibility that low-income consumers are more responsive to price -- that they have a larger "own-price elasticity" -- enabling them to avoid a larger share of the tax burden, compared to middle- and high-income people. In the end, the authors find that an optimal national tax might be about one or two cents per ounce, equal to or slightly higher than current municipal taxes in Berkeley, Philadelphia, and elsewhere.

This paper relates to an interesting debate over several years in the progressive media, which arises because of the possible tension between public interest goals, including public health nutrition goals on the one hand and anti-poverty goals on the other. For example, Bernie Sanders in 2016 opposed soda taxes, but Anna Lappé wrote in Mother Jones encouraging him to reconsider and support these taxes. Similarly, in 2017, Max Sawicky wrote in In These Times opposing such taxes, while Tom Philpott favored support.

In research in the American Journal of Public Health in January, my colleagues and I estimated the costs and effects of a national penny-per-ounce SSB tax separately for multiple stakeholders: including both richer and poorer groups of consumers, employers (who save money in health care costs with the tax), SSB producers (who lose out especially if they must absorb part of the tax and cannot pass the full value onto consumers), and the government (which wins twice, once from the tax revenue and once from the healthcare cost savings in public insurance programs such as Medicaid).

Clearly, it is not enough to compute effects for an "average person" when studying SSB taxes. Yet, even when we consider the interests of multiple income groups in society, the merits of such taxes may be surprisingly strong.

In These Times.

By the numbers: word counts in CDC nominee Brenda Fitzgerald's column for Coca-Cola

The Trump administration last week named Georgia Public Health Commissioner Brenda Fitzgerald as the next leader of the Centers for Disease Control and Prevention (CDC), a crucial federal public health agency. The CDC is based in Atlanta, so she won't have to move far.

Politico's Morning Agriculture briefing today noted that Dr. Fitzgerald has previously worked with projects that received $1.4 million dollars from the Coca-Cola Company, also based in Atlanta. Politico gives credit to a tweet from Russ Greene for noting her contribution of a 2013 column on childhood obesity to the Coca-Cola website.

Dr. Fitzgerald's column on childhood obesity follows the traditional sugar-sweetened beverage industry script with perfect rectitude, to an extent that seems remarkable for a public health official. The industry's story line prefers to emphasize physical activity rather than sugar or beverage intake as risk factors for childhood obesity, and in particular never to mention the association between sugar intake and Type II diabetes. Here are my word count statistics for Dr. Fitzgerald's column:

• obesity: 4
• health or healthier: 6
• movement or moving: 7
• physical activity: 6
• diabetes: 4
• beverage: 0
• soda: 0
• sugar: 0
• sweet or sweetened: 0
• calories: 0
• intake: 0
• consume or consumption: 1 (a reference to fruits and vegetables!)

From a sugar-sweetened beverage industry perspective, it's a perfect score.

Is the Center for Consumer Freedom no longer working on soda?

The Center for Consumer Freedom (CCF) is a classic industry-funded front group, secretive about its funding sources and utterly mercenary in its writing.

I once enjoyed debating soda policy in New York City with J. Justin Wilson from CCF in Episode 1 of a series of roundtables organized by the Museum of Food and Drink.

The Center was on my mind recently, after watching the the excellent 2014 documentary Merchants of Doubt on Netflix. There is a related book by the same title.

The Center's once-lively website now seems moribund. Here is a chart of its number of Headlines posts in the past year. The remaining activity seems focused only on attacking animal welfare organizations, not on other old favorite topics such as defending soda.

The last mention of sugar sweetened beverages that I could find was almost a year ago, covering some trivial beverage industry victory in Howard County, Maryland.

From the topic coverage, we can guess who the CCF's current funders are. Perhaps, with increased scrutiny, other industries have been providing less funding to CCF. One imagines that this organization operates on a strictly "pay to play" basis. It is hard to picture CCF continuing to cover a topic based merely on principle.

Marion Nestle's Soda Politics: Taking on Big Soda (and Winning)

Marion Nestle's new book is Soda Politics: Taking on Big Soda (and Winning) (Oxford University Press, 2015).

The book is thorough, balanced, hard-hitting, and motivating. It covers health effects, industry structure, marketing to adults, marketing to children, marketing overseas, policy responses, and advocacy movements.

The writing is clear, unassuming, and terse.

The coverage of health effects is persuasive. Nestle discusses cutting edge concerns without overstatement or exaggeration (additives and cancer, particular properties of fructose). She more strongly emphasizes the main established links with even-handed and authoritative force (tooth decay, liquid calories, links to overweight and obesity, and type II diabetes).

Nestle avoids many possible pitfalls in such a book. Though she quotes industry propaganda that paints her as a shrill critic of the modern food system, her own writing shows her to be a careful listener and reader of diverse perspectives. She calls out what is wrong, yet never demonizes opponents. Her chapter on Derek Yach, one-time World Health Organization public health champion and later PepsiCo vice president, is insightful and understanding.

Some radical authors of critical books on a particular industry seem ready not just to reform that industry, but perhaps to do away with all other such industries. One gets the sense that the author is using one industry as a vehicle for more broadly condemning the modern global capitalist economy, but the implied alternative remains blurry.

Other more mainstream authors of critical books find themselves lost for something sensible and upbeat to say in the final chapter. I most dislike it when these final chapters resort to empty hopes that well-meaning people in the industry will just see the light and change their ways.

With Nestle, instead, the reader can picture just what would happen if her book becomes influential: leading health organizations would wean themselves from soda industry money, public opinion would become more demanding, state and local advocates would win new policies on marketing, taxation, and school environments, soda consumption would follow tobacco's downward path, and the United States would enjoy lower rates of obesity and chronic disease.

This will mostly happen because of actions outside of the soda companies.

Like businesses in general, food businesses -- even the most socially conscious -- must put profits first. To be effective, advocates must understand that soda and other food corporations are willing to spend fortunes to influence political processes. Without anywhere near that kind of funding, it becomes necessary to find smarter methods for using the political process to counter soda industry marketing.

Nestle delivers a steady stream of advocacy-related diagnosis and suggestions in short well-organized paragraphs at the end of chapters throughout the book. The final chapter then seamlessly provides conclusions that feel consistent with the whole work.

The book is above all informative. For those readers who share Nestle's critical perspective on the food industry, it is obvious that this book would be informative. But here is the greater surprise: this solid book is by far the best source on this topic for any reader, with any perspective on economics or politics.

If I worked for a trade association, or an industry front group, or an esteemed professional association that relies on soda industry funding, or the House Agriculture Committee, or a sugar manufacturer, or a high-powered corporate law firm, I might store this book in my desk drawer rather than my book shelf ... yet I would read it word for word.

Agricultural economists say excise taxes for soda appear to be good policy

The new issue of Choices Magazine, the outreach publication from the agricultural economics profession, has a special policy theme on excise taxes for soda.  Although there are some interesting differences across the several articles, the final article by Carlisle Ford Runge, Justin Johnson, and Carlisle Piehl Runge, sums up:

Excise Taxes Appear to Be Good Policy

Taxing soda will reduce its consumption and raise revenue; by one recent estimate a 1 cent/oz. national U.S. excise tax would cut soda calorie consumption 8-10% and raise $15 billion per year (Brownell, et al., 2009). Moreover, from a theoretical perspective, the cross-subsidization from non-consumers of soft drinks to consumers resulting from such a tax is not large, and both classes of consumers can be shown to be better off (O’Donoghue and Rabin, 2006). Even if the caloric reduction in soft drinks is offset by whole milk consumption, the nutritional and metabolic advantages of milk versus soda are clear. If such consumption is of plain, reduced-fat milk, these advantages are amplified. Finally, a 1-for-1 substitution of milk for soda on a per volume basis is unlikely, due to milk’s digestibility relative to soda. For these reasons, wide adoption of such excise taxes appears to be good policy. Even if they fail to reduce caloric intake in young people, the quality of those calories will improve.

Troubles with Encouraging Water Consumption

A recent Boston Globe article highlighted the increasing body of research demonstrating the link between American's increasing sweetened beverage consumption and obesity, as well as some local intervention efforts to change drinking behaviors. As these efforts continue to revamp with a number of sugar-free drink campaigns gearing up locally, a question about message and framing comes to mind.

In the Cambridge study cited by the Globe, the kids were given bottled water and diet sodas, iced teas, lemonade, and punch reduced their consumption of sugar-sweetened beverages by 82% (no surprise there), and "the one-third who weighed the most at the start lost an average of three or four pounds."

However, one must look at how this type of intervention would play out in real life. A recent conversation with an advocate from Corporate Accountability International's Value the Meal campaign against fast food companies, highlighted to me the difficulties in making these kinds of campaigns jibe with CAI's other campaign of Think Outside the Bottle to encourage individuals, communities and larger entities to switch from bottled water to tap water. Often bottled water is presented as the "easy" alternative to soda or other sweetened drinks, thus increasing the number of people drinking bottled water.

Especially with kids, it is often harder to make the switch to tap water, which may have a stigma associated with it, even in locations where its quality, based on mandatory testing, is far superior to that of bottled water.

Of course, this complicates efforts to change the product mix among corporations such as Coca-Cola and Pepsi, which produce both sweetened beverages and bottled water. Although they have come out strong against efforts to pinpoint sweetened beverage consumption as a leading cause of obesity, they would be most sensitive to sales, and presumably change their product mix to more water and less soda if the market "demands" it. What happens if the market switches to tap water? Do they come out and lobby harder or change their marketing strategies?

Update: Boston Globe reports that bottled water sales are down due to the recession, rather than due to common sense.