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Berkeley Soda Study – Sugar Taxes Are Definitely, Definitively, Regressive

Much is being made of this new study about Berkeley’s soda tax. That it has all been terribly successful, that lots of people are drinking very much less sugary pop and that this is all a great thing. No doubt we’ll have health experts along in a moment to tell us all about that. From our point of view here this does have an item of interest – such sugar taxes are definitely, definitively, regressive. They really do weigh more heavily upon the poor. And, well, if that’s what you want to do, tax the poor, then sugar taxes are a good way of doing that.

Ourselves, around here, we’re unsure about that. Not entirely convinced that taxing poorer people – in the US that generally means darker people – in order to provide nice jobs telling people not to drink soda is quite the way to do it. Especially as the sort of people who get those nice jobs are going to be the middle and upper middle class types who are already better off than those being taxed. And, as the way these things work in the US, are whiter an pinker than those paying the taxes. We really don’t see taxing the darker working poor to provide jobs for the whiter middle classes as being an advance in racial justice.

Good thing we’re not in politics really:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Consumption of sugary drinks dropped 52 percent among Berkeley’s low-income residents in the three years after the city enacted a penny-per-ounce excise tax on sugar-sweetened beverages in early 2015, a new study shows. The study, which is the first to document the long-term impacts of a soda tax in the United States, suggests that taxation may be an effective tool in the fight against diabetes, heart disease and obesity.[/perfectpullquote]

That it’s regressive is shown by this:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]The bulk of Berkeley’s soda tax revenue is dedicated to supporting nutrition education and gardening programs in schools and to local organizations working to encourage healthier behaviors in the community.[/perfectpullquote]

Quite. The tax bears more heavily upon the poorer. The revenue goes to employ those middle class types. Not an advance in economic justice we feel.

But then it always was an odd contention that such taxation wasn’t regressive:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]The experts analysed the effects of taxes on sugary drinks, tobacco and alcohol in countries that have introduced them and found that the criticism that they are regressive – penalising the poorest – is unfounded.[/perfectpullquote]

As explained elsewhere:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] That’s really quite a remarkable claim, and the result of getting the definition of regressive wrong. They go on to tell us that it is those poor who change their behaviour most when subject to such taxation – telling us that the burden falls more heavily upon those poor, the definition of regressive here. What they’ve done is look at who ends up paying the revenue which sin taxes produce. Sure enough, people rich enough to buy lots of naughty things pay more of the tax. This is then used as their argument that, since the richer are paying more of the tax burden, this isn’t a regressive tax, it’s a progressive one. But that’s not how these words, concepts, are defined. [/perfectpullquote] [perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] Think on it. We tax Bill Gates at 1 per cent of his income, we tax some random welfare receiving family at 2 per cent of theirs. The vast majority of our revenue comes from the Microsoft founder but we’d not call it a progressive tax, would we? Because it isn’t, our definition depends upon the portion of income which vanishes in said taxation. The poor are paying 2 per cent of income, the rich 1 per cent, that’s a regressive tax. Sin taxes are a higher portion of low incomes than they are of high incomes, that makes them regressive taxes. There’s nothing more to it. It is, of course, exactly because such sin taxes bear more heavily upon the incomes of the poor that the poor’s reaction to them is greater. That very proof they use, that the effects upon health are progressive is exactly what shows us they are wrong: because it bears more heavily upon the decisions and actions of the poor. [/perfectpullquote]

The Berkeley claim is that the poor are drinking much less soda as a result of the tax. OK, accept that – that’s proof that the tax is a regressive one because it’s having this great impact upon the poor. QED.

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thammond
thammond
2 years ago

Not sure defining a tax as regressive in that way is remotely helpful. A flat tax on anything is then “regressive”, because anything the poor buy takes up a higher proportion of their income than someone less poor. Car tax is regressive, tax on wine is regressive, fuel tax is regressive.

But surely in these cases “regressive” is absolutely fair? Why should a person with a higher income pay more to own exactly the same car as a poorer person? Or to drink exactly the same bottle of wine?

timworstall
timworstall
2 years ago
Reply to  thammond

That’s what regressive means. Regressive also isn’t a synonym for “fair”.

Chester Draws
Chester Draws
2 years ago
Reply to  thammond

If we put the price of wine to $200 a bottle, so that only the very rich could afford it, how would that be “fair”?

That you don’t spot the current tax as affecting people unevenly merely means you’re in the group that can afford the current tax level on wine. Not that it isn’t affecting some more than others.

Brian Putman
Brian Putman
2 years ago

But the current zeitgeist is that sugar is the devil and kills, the people cannot be trusted, they are not enlightened, they ate not of our level!

Jonathan Harston
Jonathan Harston
2 years ago

I like the picture: your monthly ration is 2lbs of sugar. I bought a 1kg (ie 2.2lb) bag of sugar on 12-Dec-2018 and 3/4 is still there. So my “monthly” ration would last me four months. I sometimes think I should welcome these authoritarian rationing demands as I’d be able to make out like a madman on the surpluses I would have, like a non-smoker in a prison camp.

Quentin Vole
Quentin Vole
2 years ago

It isn’t just spoonfuls in your tea/coffee. It’s also the sugar content of soft drinks, fast foods etc.

Rhoda Klapp
Rhoda Klapp
2 years ago

Regressive is just a word people use to criticize a tax they don’t like. This tax is tyrannical. Regressiveness is not its intent, they want to stop the poor from having sugar at all but don’t have either the guts to ban it or the integrity to stop using their power unjustifiably and to leave it the hell alone.

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