If a fat tax is coming, here's how to make it efficient, effective

December 2, 2011, Iowa State University

A 'sin tax' applied to sweetened goods on store shelves is not the most efficient, effective method of lowering caloric intake from sweet food and would be more disruptive to consumers than necessary, according to Iowa State University research.

With a national debate taking shape about the possibility of a national tax on foods with high sweetener content, ISU economists have examined how such a tax would best be applied.

Rather than assessing a tax on these sugary goods as they are taken through the grocery store checkout lines, the research shows that a better way is to tax the food processers on the amount of caloric sweeteners, such as and sugar added in processing before the product hits the shelves.

The economists, John Beghin and Helen Jensen, both professors in the Department of Economics, are quick to point out that they are not advocating for or against any tax, but simply researching how and where a possible sweetener tax would be most effective.

"We are not saying. 'To resolve obesity, here is what you should do,'" said Beghin. "In that sense, we are not advocating anything. We are saying, 'Given that you are considering a panoply of tax instruments, and there is a possibility of a soda tax, is there a better way to use that idea?'"

"This is motivated," added Jensen, "by a lot of ideas out there that say we could tax sweetened products. We wanted to see what the effect of such a tax would be and, alternatively, if you imposed a tax on ingredients, what would be the effect of that."

The research, published in the journal Contemporary Economic Policy, shows that if the goal of a sin tax on sweeteners is to reduce calories consumed, lawmakers should consider taxing the inputs instead of the final product.

Assessing the tax at the processing stage allows food processors to reduce the amount of sweeteners they put into their products. Processors will also have incentives to use more of the lesser-taxed , and less of the higher-taxed sweeteners that are heavy in sugary products.

These solutions would also raise the price at the store less than a direct tax on the end product, while reducing the calories attributable to the sweetener, according to the study.

"Taxing the processing ingredients makes more sense when compared with taxing the end product," said Beghin. "You can abate the same number of calories without having consumers face such high prices."

Any new tax on sweeteners, even the tax on food inputs proposed by the study, will cause prices to go up. One drawback of any tax on sweetened goods is the regressive nature of that tax.

In economic terms, regressive taxes are those that impact poorer economic groups more than higher ones.

"Since much of these (sweeter) goods are consumed by poorer economic groups," said Beghin, "you may be increasing the cost of calories for poor people."

The study looks only at calories in food. The research does not make any claims about lowering obesity.

The United States' obesity rate has many factors, and the amount of calories consumed is only one, say the economists.

"We are not looking at health aspects," said Jensen. "Just the consumption of calories from sweetened goods and the disruption to the consumer."

The findings of the study fit generally accepted economic principles that say if you want to change a given behavior or economic decision, you should try to find a policy instrument that is closest to the behavior or decision, according to Beghin.

As part of the study, the two collected data from both government and private sources on industrial food inputs.

"We spent quite a bit of time assembling a data set based on published data on what inputs the food industry uses," said Jensen. "So we know that for all the different food sectors, how much sugar and corn syrup go into that industry group's food processing. You'd be amazed to see how much goes into food processing."

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2.6 / 5 (5) Dec 02, 2011
The more likely thing that will happen is the tax will just raise the price of everything relevant, and then people will just buy it anyway.

Look what smoking addicts pay for a pack of cigarettes, so they can give themselves cancer, because of nicotene addiction, for goodness sakes.

I think a "Sin" tax on sweeteners, particularly all-natural sugars, would be an insult to the freedoms upon which this country was founded.

Sugar comes from canes and beets, not some mystery goo or anything like that. It's not bad for you, unless you eat tons of it, but then again, over eating anything would be unhealthy if it was taken too far.

The problem with soda is that everyone is addicted to the caffeine, ALONG WITH the reinforcing stinulus of the sugar AND the unique texture and pop of the carbonation, so they can't really quit even if they want to.

So it's a negative addiction to caffiene, but with multiple positive reinforcements, that is of the negative behavior.
2.6 / 5 (5) Dec 02, 2011
So the caffiene addiction makes you crave the soda, even when you aren't thirsty, and plain water or some other drink has the feeling of just "not quite doing something" that your body "needs" due to addiction.

Also, most juices, even 100% natural juices, end up with as much or more sugar in them than sodas per unit volume. If you don't believe me, just check a bottle of grape juice or apple juice.

If I remember right, there's about as much sugar in 8 ounces of grape juice as there is in 12 ounces of soda, so I guess they'll tax grape, apple, and orange juice as well.

Besides all that, when you eat ANYTHING that is a bread or starch of any kind, you guessed it, it makes the EXACT same sugars as that from soda, juice, ice cream,e tc, in your body through digestion.

When starch is in the presence of water, it breaks down and makes GLUCOSE which is the same thing happens to Sucrose and fructose anyway.

Sucrose is Glucose and fructose bonded together, which breaks in water
2.6 / 5 (5) Dec 02, 2011
So if you eat a slice of bread, I don't care if it's whole grain or whatever, and then drink a cup of WATER, it's going to make about as much sugar, if not more sugar, than drinking a can of soda, and it's for the most part the exact same sugars (or rather half of the exact same sugars.)

But the Sucrose you get anyway from fruits and fruit juices on the food pyramid, so if you eat a slice of bread and eat an apple, and then drink a cup of water, you made all the EXACT same sugars that are in a can of soda.
3.5 / 5 (8) Dec 02, 2011
How about instituting a smug tax on all the PC Nazi's who feel it's their duty to tell everyone else how to live their lives.
2.1 / 5 (11) Dec 03, 2011
What will 'progressives' do with the tax?
If 'progressives' claim the free market doesn't work why do they propose artificially raising the prices of products they assert are undesirable?
Why not ban the offending product out right?
Or if they want revenue, raise taxes across the board on everything.
Another example of 'progressive' hypocrisy.
5 / 5 (2) Dec 03, 2011
When starch is in the presence of water, it breaks down and makes GLUCOSE which is the same thing happens to Sucrose and fructose anyway.
Fructolysis differs from glucolysis enough to play its own role in fatty liver and obesity. IIRC the hepatic enzyme is inadequate when dealing with larger amounts of fructose, which leads to problems.

On the larger topic, if you want to keep your population healthy, you need to change attitudes and habits. Things like this tax would just turn an unhealthy population into an unhealthy and angry one.

And finally, you're limited to 1000 characters for a reason.
3 / 5 (2) Dec 03, 2011
A "fat tax" would hit the poor the hardest. Aside from its many, many other flaws, I suspect this one aspect will be a (welcome) deal-breaker.
1 / 5 (2) Dec 04, 2011
Lets do science here. Sugar is like water, in that they both are not unhealthy when consumed is appropriate amounts.
Drink too much water however will kill you. Eat too much sugar and you get fat and rot your teeth.

Rygg Next election is one of the most important in history for the USA. Either the US will choose to be destroyed by anti-science progressive PC idiots or will choose freedom. I think from what I am seeing here on the progressive left coast, there are more and more former progressives.
5 / 5 (1) Dec 04, 2011
Sugar is not bad for humans?
I don't support taxing it, but I do support ending sugar subsidies of all sorts.
The increasing number of type II diabetics, high cholesterol, high blood pressure, can be linked to excess sugar/carb consumption. Sugar and carb consumption is promoted and subsidized by many govts.
1 / 5 (1) Dec 04, 2011
No problem in ending subsidies.
1 / 5 (4) Dec 04, 2011
Why is the darling of the Tea Party such a hypocrite? Actually a more appropriate question would be, why does no one in the Tea Party care?

Representative Michele Bachmann of Minnesota, a critic of federal spending, received between $5,000 and $15,000 in income last year from a family farm that has received more than $250,000 in federal subsidies, according to her most recent House financial-disclosure form.

She reported that her husbands psychotherapy practice and clinic was valued at $600,000 to $1.25 million.

The clinic received $30,000 in government money, which Bachmann said on Fox News Sunday in June went to train employees.

Looks like even real-job-creatin'-mer'cans like a little gubmint cheese now and then. Lol who are they kidding, they are the real "welfare queens".
2.3 / 5 (3) Dec 06, 2011
I agree with FH, lets get government out of health care. No more funding Planned Parenthood abortion mills, no farm subsidies, no government supporting the ARTs.

FH, you are becoming a conservative. The way to stop government from supporting groups your don't like is to shrink government.

The ONLY group that wants to shrink government is the TEA Party, so lets get them elected, and if they don't do what they say they will do FIRE them without mercy during the next election. Keep doing that till elected officials realize they WILL BE HELD accountable.
1 / 5 (5) Dec 12, 2011
I agree with FH, lets get government out of health care.

I said nothing of the sort liar.

The ONLY group that wants to shrink government is the TEA Party

No they don't, you are just too uncritical and naive to see where they wish to increase the size of government.

Merry Christmas :)

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