The Wrong Kind of Fat Tax: Forget Taxing Soda to Curb Obesity, Tax Producers of Sugar and Sweetners
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In their model, the researchers did not tax substitute sweeteners like honey that are perceived as healthier. It’s possible such a tax would prod producers to shift, on a large scale, to these types of substitutes.
“You can certainly see evidence of that historically,” Jensen said. Manufacturers, shifted to high-fructose corn syrup in the early 1980s because tariff policy sent the price of sugar up. And in some cases, producers have even migrated to more sweeteners in products to compensate for reducing fat that now must be included on nutrition labels.
In the case of corn syrup, all of this might sound like sticking a tax on something we already subsidize. But Beghin says corn prices have gone up so much over the last decade — in part thanks to the rise of biofuels — that corn subsidies are no longer that significant. If we removed corn subsidies, that would have the effect of cutting back on only one-half of 1 percent of the sweeteners people consume (compared to the 10 percent reduction the researchers forecast with their tax).
There is, however, a much larger picture here: The real problem isn’t sweetener consumption, it’s obesity.
“Following the same idea of the targeting principle, if obesity is the problem, you should target obesity,” Beghin said. “And one way to do it would be provide incentives for better health behavior, or penalties for bad health behavior.”
Food taxes — even smart ones — don’t exactly do that.
“But very often,” Beghin said, “you have limitations on what you can do with health policy.”