Why does having a soda tax seem so hard to achieve in the US?

Question

According to this Harvard article eating too much added sugar can lead to serious health issues:

A sugar-laden diet may raise your risk of dying of heart disease even if you aren’t overweight. So says a major study published in JAMA Internal Medicine.

Wikipedia confirms this:

Added sugars are sugars and syrups added to foods during processing or preparation and sugars and syrups added after preparation. Excessive intake of added sugars, as opposed to naturally occurring sugars, is implicated in the rise in obesity

The same article tells us about how this tax was imposed in various US states, but in some cases taxation was cancelled.

Question: Why does having a soda tax seem so hard to achieve?

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Since health effects of sugar were challenged in a comment, I will also add a better source (Medscape, requires free account for full article):

Sugar Is the New Tobacco, so Let's Treat It That Way (..) So, how much sugar do we need? For the purpose of health, the optimum consumption is zero. Added sugar has no biological requirement and is, therefore, not by any definition a "nutrient." It is the fructose component (sucrose is 50% glucose and 50% fructose) that fulfils four criteria that justify its regulation: toxicity, unavoidability, the potential for abuse, and its negative impact on society.

Answer 1

The short answer is because complaining is louder than passive agreement. It often doesn't matter if a bill is popular if there's a vocal objection to it by a sufficient minority. The objection can be in the form of protests, or a special interest or in some cases, an issue that can swing votes, but some kind of objection, with enough teeth to get noticed can be enough to block a law even if that law passes the majority vote test.

We don't see situations like that come up very often because most issues we hear about get people polarized so you get people and/or special interests yelling objection from both sides and the politicians will for the most part, defend their side. It's less common to get objection from only one side, but the sugar tax is an example of that. I've never heard anyone say "god dammit, how could they fail to tax sugar again - vote that guy out of office".

There's not really a big "no tax on sugar" constituency either though there's probably some effort by soda and candy manufacturers. But there's also the people who like soda who don't want a tax on what they like. There's also a pretty fair number of people who object to government intervention of any kind. The "don't tell me to wear a bicycle helmet" protesters as a rather funny example, or a more relevant example, Mike Bloomberg's no big soda law, was the subject of ridicule by people who felt it wasn't government's place to write that law. Even though the department of health liked it people called it a nanny state and if you talk to people on the street or do a google search and you'll see that a lot of people ridiculed Bloomberg's soda bill.

So to sum up, 60% popularity of a bill doesn't do much when that 60% isn't invested. A vocal minority is often able to get more politicians on their side than a mostly indifferent majority and believe it or not, there actually is a somewhat organized and vocal objection to ideas like a sugar tax or Mike Bloomberg's large-soda ban.

That said, and as you note, soda taxes have happened, though they are often unpopular. This article suggests that the Philly soda tax was about raising money for a cash strapped state as much or more than it was about concern over the dangers of sugar.

Answer 2

Government fiat, by design, infringes on the liberties of it's citizens. Frequently such infringement is desirable or at least acceptable: enforcement of property rights, maintenance of public infrastructure, etc. But the gains have to be carefully weighed against not only the loss of liberty in a specific case, but the possibility of creating the unintended consequence of people resenting all (or at least some unrelated) government fiat.

Consider the case of speed limits in the US. Speed limits are intended (or so they tell me) to increase the safety of motorists. They sound great. But no one follows them because they are frequently laughable. They're too low because they're carry-overs from a time when cars were slower, fewer people drove, people that did drive drove less often, etc. Frequently politics interplays with changing them in various predictable but unfortunate ways. On some stretches of interstate people routinely drive 20mph (32kph) over the posted speed limit because they are unlikely to get caught and it is relatively safe to do so (flat straight 5 lane highway).

But not only are people not any safer (they drive the speed they want to) you now have a decreased respect for the rule of law by having a law that everyone ignores. This unfortunate situation is compounded by the fact that speeding tickets have become an important revenue source for various law enforcement agencies, meaning that police officers randomly enforce a law that nobody otherwise pays much attention to creating this adversarial game between police and the public they are supposed to serve. One of the most striking things to me about travelling internationally is how this adversarial attitude with law enforcement doesn't seem to exist in many other countries.

Think of it this way. A government gets X enforcement tokens as given in a modern democracy. If it spends more than X then either the rules become sufficiently burdensome that everyone starts ignoring them (thus undermining the system) or the government has to resort to tyranny to maintain it's top-heavy authoritarianism.

And lets say that taxes cost less (people resent them less) than outright bans. Let's say that bans cost 5 enforcement tokens, and taxes only cost a single.

Would people drinking less soda be good? Sure. Good enough to justify 5 enforcement tokens? No. Nobody seriously considers outright banning soda: it would just be absurdly restrictive. Is it worth spending a token on? Maybe on it's own it is. But many US citizens already think the government is too restrictive, and certainly the financial stars are aligned in favor of not slowing consumerism in any fashion at all. In that climate is it worth spending a dwindling supply of enforcement tokens on?

NOTE ON PIGOUVIAN TAXES

These are a great idea when some activity generates negative externalities that the active party doesn't suffer the consequences for. The poster-child example is the polluting factory being taxed for polluting. It's not entirely clear that such is the case here: even in the era of the ACA the costs are largely borne by the soda drinker, at least in the US. Soda-tax-as-Pigouvian-tax may make more sense in countries with a more socialized healthcare system.

Answer 3

While @userLTK makes a point that fits quite generally on creating a policy popularly accepted but vocally opposed, taxing soda has some issues unique to it.

Taxing soda could be justified as a Pigovian tax as it would lessen the use of sugar that already creates health care costs to the society. This means that the evil isn't soda itself, but rather the sugar that it contains. This is an argument that the advocates and the soda companies would use; if the problem isn't soda, but sugar, then you should rather tax sugar. Otherwise people could start buying juices over soda that have added sugar also. They could buy sugar and mix their own soda home using carbonating products like SodaStream instead. And it would arguably give an unfair competitive edge to these other products while the total outcome would remain the same: people would still consume sugar. They could even say that cookies, candies and ice cream all have added sugar in them and it would be unfair to only tax soda.

The obvious solution is to start taxing sugar or added sugar itself. This would of course be much more complicated tax to create as it would affect so many different kinds of products. Some could again argue that fat containing food should be treated similarly. Additionally if only added sugar was taxed products using sugar already in a fruit would have an advantage (after all the health effects of sucrose and fructose are almost the same).

EXTRA: As an extra I'll tell what happened in Finland. In 2011 Finland created a tax for sweets, sodas and ice creams. It wasn't based on how much sugar they contained, if any, and it was 95 cents per kg of solid product and 11 cents per liter of liquid product. Sales immediately fell a few percents, but after a year jumped back to normal. Companies adapted to the tax; since cookies were outside the tax they created cookies that were 90% chocolate and 10% cookie and called them cookies and thus were not taxed like other chocolate (a lot of these kinds of products emerged). In 2017 the tax was dismantled as it was seen to distort competition.

Answer 4

The reasons covered in other answers are good, but I don't think they really get to the heart of what makes soda taxes so hard to implement in the U.S.

Soda taxes, in particular, are highly visible, blatantly hypocritical and (at least as implemented in the US), easily avoidable. Most other taxes and assorted acts of regulation don't share those traits, which is why I think you see more opposition and push-back against soda taxes than, say, sales taxes or income taxes.

Visibility

Because of the way they've been implemented, consumers have noticed or been forewarned of the direct cost to them. For example:

That's a hard thing to spin. "This thing is now a third more expensive, because of this specific tax. Don't blame us, go tar and feather the Seattle City Council, please."

The fact that it kicks in and gets noticed every time someone orders a soda with their Big Mac is also an aggravating factor. Not only is there a visible, significant cost, it has a high rate of occurrence for those impacted by it.

Hypocrisy

One can certainly make the argument that there's no shortage of hypocrisy and blatant lying in government policy to begin with, but it seems especially thick in soda taxes.

As you noted in your question, sugar is unhealthy, at least at the levels in American diets. That being said, using this as a justification for levying a new tax is blatantly hypocritical. That's probably the oldest lie in the book, and enough people have noticed and are pushing back on that particular lie at this point. Like alcohol and tobacco taxes and speeding tickets, and every other government fee levied against "unhealthy" or "undesirable" behavior, the money raised doesn't actually go to paying for the costs of the targeted behavior. It goes to the general fund, and gets spent on everything from public-funded art to government administrative costs. Philadelphia, for example, plans to use the revenues from its soda tax to fund public schools, so... saying "because it's unhealthy" out of one side of your mouth and "funding public schools" out of the other is just a long-winded way of admitting that you're lying about your reasons.

The other problem, which applies to all government revenue, but is especially off-putting when heath or safety is used as a justification is that once they have the revenue, the government in question tends to get addicted to it.

Here's a fun older NYT article about that regarding government tobacco revenues, and there's been even more drama than usual around tobacco taxes recently - with smoking rates dropping, governments are having a hard time making up the revenue, and occasionally admitting it's because of less revenue from tobacco taxes. (Which obviously hurts the already incredulous public health justification for these taxes.) So, on the one hand, government is taxing it to reduce this unhealthy behavior, but on the other hand, now that the behavior's reduced, we need more taxes to bring in enough money.

And compounding that problem is that taxing one particular unhealthy behavior doesn't necessarily lead to healthier behavior. For example, since Philadelphia instituted its soda tax, soda sales are down, but liquor sales up. Probably not what most public health policy professionals would consider an improvement.

Soda taxes, in particular, are also highly regressive - soda consumption is highest among those with lower income rates, which undermines notions of fairness, as well as the public health argument. (In that the lower income people are the ones government-funded healthcare is intended for, and the system is set up in a way so that it's not the poor who are supposed to be paying for their own government-funded healthcare).

And last, but definitely not least, most (maybe even all) of these soda taxes apply to carbonated and/or sweetened beverages. So blaming sugar for being unhealthy, while taxing diet beverages that contain no sugar is such blatant, obvious BS, that I can't believe any politicians thought they'd get away with it in the first place. (And of course, the tax would fail at its actual goal of raising revenue if it was only targeted at regular drinks, because too many people would just switch to diet, so that's not an option.)

Avoidability

Unlike most other taxes we face in our day-to-day life, this is a very avoidable type of tax. It's all cities and counties implementing the tax, not states or federal government, so it's easy to avoid the tax by driving a little bit. This both irritates people, leading to more vocal opposition and undercuts revenue from the tax, because people can often literally cross the street to avoid it:

"It's a bad tax," Melvin Robinson, owner of Bruno's Pizza, tells Stossel. His store is on the outer edge of Philadelphia, so his customers just cross the street to avoid paying the tax.

That's not really an option with other taxes - you can't easily move to avoid income tax, and sales taxes tend to be fairly similar within a given geographical area, but soda taxes are rare and create an easy situation for avoidance. (And smuggling. Yup, soda smuggling.)

Not that any of this is meant to detract from the other reasons given in other answers, such as louder minority opposition or taxation/regulation overload, because those are valid points, but I think those are problems that apply more generally, whereas soda taxes have these specific issues that cause them to fail where so many countless forests of new regulations and taxes succeed.

Answer 5

The Role Of Sugar Subsidies

Beyond the points made in other answers it is worth realizing that farm subsidies significant subsidize domestic sugar producers, as do many foreign countries that also produce sugar.

In the absence of those subsidies (which are functionally a negative tax on sugar) or tariffs of equivalent effect, U.S. consumers would buy foreign sugar which is subsidized and hence cheaper rather than domestic sugar, and U.S. sugar farmers (and related agricultural industries that process and distribute it) would go out of business. Sugar industry farms and firms, naturally enough, lobby legislators in an effort to prevent this from happening.

One could achieve the same price impact as a sugar tax by eliminating domestic sugar producer subsidies and imposing a tariff calculated to counteract the benefits of foreign sugar subsidies, at a much lower administrative cost, rather than subsidizing with one hand and taxing with the other.

Incentives and Incidence Of Taxation When Taxing An Inexpensive Staple Good

Also, sugar taxes are unlikely to have much impact on sugar consumption, because sugar is a commodity that empirically behaves like a "staple commodity" and demand for and consumption of staple commodities is not very responsive to price, especially when the share of an individual's total consumption involved in buying a staple is small so that an ability to pay is not an important factor for the marginal consumer.

So, rather than operating primarily as an incentive not to consumer sugar (as illustrated by the example of Finland), it operates primarily as a regressive sales tax, since the poor spend a larger share of their income on sugar than the rich, even though the rich may consume more sugar in absolute terms. And, there are a variety of reasons that regressive taxes are not politically popular with many political factions.

Answer 6

I think there are really two to three main points as to why there is no soda tax yet:

1. It does not seem to convince enough people it would actually work the way it is intended. (I said to myself about 20 years ago I would quit smoking, once a pack costs more than 5 EUR (was about 2-3EUR at that time) well and I am still smoking... Consumer decisions are not always rational not even on a financial level)
2. People tend to like things that are consistent, if we tax this now just to discourage people from using it, why don't we just do that all the time - with all the pesky things we want to discourage? Thing is, we do, to a certain extend, but not consistently (1) and not for all things.
3. Introducing a new tax creates an incentive for the state to keep that tax generating revenue. The state will want to have numbers for the new tax so it can get estimates on the collected tax, which will then get the state into the dilemma of "wanting to discourage thing x via tax", but also "wanting the tax revenue of thing x"

Simple answer is, because political parties have agreed on the status quo, but I think the reasoning you follow is a non-sequitur.

Having something being dangerous exist (in general or at a certain dosage) does not automatically lead to wanting to tax it, because there are other options:

1. doing nothing (yes we acknowledge it is dangerous, but free people should be able to make the choice by themselves)

   You are allowed to walk around with bare feet, it is not forbidden not to wear winter clothes in winter, you are even allowed to spend all your money on the first of the month - although it may be dangerous and could even kill you.

2. discourage use (by encouraging opposite behaviour via incentives or taxation of the undesired behaviour)

   Carbon taxes try to discourage high emissions of CO2, reason for tobacco tax is often stated as to discourage tobacco consumption (Which might have been the original intent, but seeing increases in that tax being made in stages often with the argument that an immediate increase would scare away too many smokers at once, it can also be seen as hypocritical)

3. outlaw it altogether

   You are for example not allowed to deal with or own hard drugs or nuclear weapons.

(1) I do realize I wrote "people like consistent things" and then I wrote "we do [...] but not consistently" - This is not a contradiction, it is simply the result of compromises, which some describe as the art to achieve what nobody wants

I will try come back to this answer to add some sources for my claims regarding carbon and tobacco taxes

Answer 7

Another reason is that in most implementations, it's been seen a more regressive tax than comparable sales taxes. The sugar taxes are typically applied only to prepackaged/bottled beverages (soda being the most common, hence the 'soda tax' name) and not to things like coffee drinks made to order at a coffee shop. The former tends to target lower income groups while the latter, higher income groups.

Other sales taxes (such as tobacco) are applied across the board on all products, so are seen as less regressive in comparison.

Of course, not all politicians see regressive taxes as a bad thing. But the party that tends to push for soda taxes, typically does see regressive taxes as less-than-ideal, so it hasn't been met with universal praise.

Answer 8

Like anything political, it boils down to cost versus benefit.

A lot of people drink soda, especially the sugary variety. Placing a tax on that would be noticed immediately, and not in a positive way. So, the political cost of a soda tax large enough to make an impact on consumption would generate a fair amount of negative political opinion on the part of the electorate, towards those who voted for that tax. So it has been in the US states that voted a soda tax, and that negative political opinion doubtless led to the rollback in some of them.

In the grand scheme of things, too much sugar in soda is way down the list of health issues. The two primary killers of people today are heart disease and cancer. Long before we start telling people they can't drink soft drinks, we might want to focus our efforts where the greatest number of lives can be extended.

Finally, we have the basic issue of free will. Taxing or outlawing activities on the basis of health care costs won't just involve sugar water. There are other activities that have a higher than normal risk of health issues or injury, and consequent impact on health care costs. Too much red meat is bad for you, so a tax is in order. Rock climbing... causes unnecessary injuries. Better ban that. Coffee... can raise blood pressure. Let's tax that to curtail its use. Skiing can really mess you up, that has to go. Uh oh, your favorite chardonnay has increased health care costs associated with its consumption...

You see where that can lead... we'd all be living nice, safe lives dictated by health care costs, living on bland, tasteless tofu and soy milk, and not engaging in any activity that might carry an 'unnecessary risk of injury', as defined by some faceless bureaucrat. One does have to wonder about the quality of life, if the little joys are taken out of it. Could lead to another health care crisis: increased suicide from terminal boredom.

It is difficult to get a soda tax imposed, because a large number of voters don't believe that the state should interfere with their lives on a relatively trivial issue.

Answer 9

There are lots of answers here that delve into details, but there is something more profoundly simple at play: Sugar is a substance that has existed for centuries and has never become a real issue until recent years.

Also, a tax on sugar would cut across all age groups. Unlike alcohol or tobacco, kids eat sugar and—wait for it—there is nothing wrong with it.

Beyond all of that comes the issue of “food deserts” which mostly affect poor and those economically challenged in the world.

And if you live in a poor neighborhood you have fewer healthy food choices. So soda and sugary food is more common. So while is this all dietarily—and socially—unpleasant, a sugar tax would adversely affect those who are too poor to live in neighborhoods that have better food choices and pretty much instantaneously a “soda tax” would become a “poor tax”; a tax on a group that is already strained and now will have their food taxed on top of it.

If you truly want to positively impact people’s diets you can’t ban or tax something unless you can provide an equal or better choice at a near similar cost with a similar ease of access. If you do not, you are basically instituting a “poor tax.”

But then you also state this:

“Added sugars are sugars and syrups added to foods during processing or preparation and sugars and syrups added after preparation.”

Okay, so I am not in disagreement here. Lots of unwanted sugars and syrups are added to foods on top of what already exists in the food itself. Whose fault is that? The consumer’s? Or the manufacturer’s?

I didn’t tell—for example—a ketchup maker to add excessive sugar to ketchup. I just want ketchup! They are the ones adding it to their products to—basically—water down the recipe and make more profits. Why should I as a consumer pay for that?

And in the case of soda, sugar water costs almost nothing to make. That is why you see HUGE liter bottle of soda costing less than a simple 16 ounce bottle or 12 ounce can of soda. Why should I—as a consumer—now be taxed more on something that seems to exist in a world of commodity pricing at best?

Answer 10

Almost every person in the United States (and some parts of Europe) has potable water coming out of their sinks and showers. So why do people buy sugary drinks, when it's demonstrably unhealthy, and orders of magnitude more expensive than regular tap water put into a plastic reusable bottle?

Because they want to.

We may as well ask why we don't ban alcohol, when we know alcohol is so bad for us? It turns out, humans aren't perfectly logical machines - we like bad food, bad drink, bad habits, and dumb things. It's part of what gives life its variety and flavor.

It should, therefore, not be surprising that people who enjoy a little indulgence every now and then be opposed to direct government action against their pursuit of happiness.

Answer 11

Taxing only soda in order to reduce sugar consumption is akin to taxing only beer while trying to reduce alcohol consumption.

As a sugar addict, I can tell you I don't care much how I get it: I have my preferences of course (soda not being one of them), but substitution works quite well. Tax soda and I will switch to sweet juice-based beverages. Tax that and I will get a chocolate bar with my diet drink. Or buy raw sugar and add it to my liking. Or simply buy a more expensive soda anyway.

If you get to the point where you will really force me to reduce my sugar consumption with taxes, your measures will be so drastic that 90% of the population will not be happy.