On recent findings about the sugar tax

Opinion by Ramya Balasingam
Nov. 30, 2015, 11:59 p.m.

Active debate has always surrounded the validity of the sugar tax, especially in the United States. Proponents argue that the sugar tax is a necessary measure to combat the extremely high childhood — and adult — obesity rates in America. However, critics argue that such “nanny-state” taxes are unnecessary because they limit the freedom of choice consumers have when they go to a supermarket or convenience store and want to buy a few snacks.

With the recent news that such taxes appear to be effective in controlling the average household’s consumption of sugary items, the sugar tax is gaining in popularity. Following the success of Hungary’s 2011 sugar tax, France, Mexico, Chile and Berkeley, California have now introduced sugar taxes.

But questions remain about how high taxes need to be in order for them to be effective. It has been shown that low-income households have been the most responsive to the sugar tax, having cut their consumption of sugar and carbohydrate-heavy substances by 17 percent within merely a year after introduction. This is a good thing since low-income people are more vulnerable to obesity and diabetes, because of their lack of access to healthcare programs.

But at the same, it has also been shown that relatively high taxes are required in order to influence consumer behavior. Although several cities in America have introduced sugar taxes in the range of about 3-7 percent, consumption has not been affected that strongly. Sugar taxes need to be significantly higher to persuade consumers to stop consuming these carbohydrate-heavy substances.

So, how high can such taxes be raised, without significantly affecting the reasonable and occasional consumption of sugary snacks? And should sugar taxes be enforced uniformly throughout a city, thus limiting a consumer’s options about where to shop in order to “beat” the sugar tax?

When I first heard about the sugar tax a few years ago, I was skeptical about its use and validity, since I believed in the importance of having options, and of choosing to indulge, without having to pay extra for it. However, having learned about the surprisingly strong effects the sugar tax has had on reducing consumption of sugary substances across the globe, I now think that it is necessary — especially in low-income areas, where access to healthcare is highly limited. Although sugar taxes might adversely affect the income of certain stores, I think high sugar taxes can, on the whole, have a positive effect on society. The health and safety of people is more important than the revenue of stores that can profit by selling other more healthful products.

But at the same time, I think it’s important that consumers are given the option to choose to shop in areas where the sugar tax is not as high — or non-existent. People should be able to make these decisions — especially such personal ones involving a relationship between budget and indulgence — for themselves. So, I would vote against having a uniformly regulated sugar tax.

It is important to note that so far it has been demonstrated that sugar taxes exceeding a certain threshold will result in modified consumer behavior. More research has to be done to show that the observed improvements in consumption patterns are correlated with improved health outcomes. Since the idea behind sugar taxes is the betterment of public health, it is important to show that increased sugar taxes are effective in lowering obesity and diabetes rates. In a few years, if no perceptible effect on public health is noticed, then our position on sugar taxes will need to be revisited.

 

Contact Ramya Balasingam at ramyab ‘at’ stanford.edu. 

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