Tax sugar-sweetened drinks to fight obesity

Eating too much added sugar has become one of the riskiest health behaviors in the modern world. None too soon, governments are waking up to the fact. Staggering under the burden of increasingly overweight populations, more than 30 countries have put new taxes on sugary beverages, most in just the past four years.

This is good policy, and it needs to be taken further.

The sugar in soft drinks is especially harmful, and not only because sodas are so popular. A single 12-ounce can contains three-quarters of the daily added sugar the World Health Organization recommends as a safe maximum. After drinking soda, people tend not to compensate by eating fewer calories at the next meal – so a can a day could lead to a gain in weight of 5 pounds in a year.

The liver responds to a blast of liquid fructose by turning some of it into fat, which in turn helps set the stage for diabetes, cardiovascular disease and more. Among America’s obese children, doctors are seeing more and more dangerous cases of fatty liver disease. Governments everywhere should tax sugar to persuade people to cut back.

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Critics argue that soda taxes are regressive; in fact, they’re paid largely by wealthier consumers and they mainly benefit the poor, who are more price-sensitive and suffer disproportionately from obesity and diabetes. The food industry, now fighting back in the U.S. with ballot initiatives that would bar cities from passing new soda taxes, argues that they cost jobs. But the evidence suggests otherwise. In Philadelphia, for instance, unemployment claims for industries potentially affected by the tax decreased significantly during the first year of the tax.

Sugar taxes should be smarter, as well as higher. Most are applied per unit of liquid; it would be better to set them per unit of sugar, thus encouraging beverage makers to minimize sugar content per can or bottle. The U.K.’s new soda tax is higher for soda, with more than 8 grams of sugar per 100 milliliters than for those with 5-8 grams. This prompted companies to reduce sugar content even before the tax went into effect last month. As more governments introduce or raise soda taxes, they also need to keep careful track of their effects. The evidence so far confirms that they change behavior, which suggests they should be applied as well to added sugar in foods.

Bloomberg View editorial.