COMMENTARY
 by Ben Adler |
On the day that New York City Mayor Mike Bloomberg announced a ban on soda cups larger than 16 ounces in restaurants, movie theaters and similar business, Jon Stewart noted that he was in the uncomfortable position of lining up with Tucker Carlson. Many liberals at home nodded ruefully in agreement.
If the situation feels confusing—especially given liberals’ general support for Bloomberg’s ban on smoking in bars and restaurants—let me try to clear things up.
There are three main justifications for such measures: the health of others, the health of the person himself, and the social cost. In the case of indoor smoking, secondhand smoke hurts others, especially workers exposed to it all day for years on end. That justifies a ban. By contrast, drinking too much soda hurts the drinker’s health, but no one else’s.
That’s where we get to the social cost. Both smoking and excessive soda consumption create health problems which cost money to treat. And the best way to price the social cost of soda would be to tax it.
Why is a tax superior to a ban? For one thing, as a businessman like Bloomberg should understand, the best way to minimize a negative externality—that is, something we’re trying to reduce—is to put a price on creating it and let the magic of the market sort out the rest. That’s the principle behind strategies like cap and trade, rather than merely imposing, say, a moratorium on new power plants that could have unintended consequences.
Slate’s Matthew Yglesias makes two additional points for the superiority of a soda tax over a ban: First, the current rule can be easily circumvented by just ordering several smaller cups of soda. “Though I doubt in practice that tons of people will respond to this rule by ordering three 12 ounce cups of soda, at least some people will some of the time and the policy objective is completely undermined by that loophole,” Yglesias writes. “By contrast, a per-ounce tax on sweetened beverages would equally deter all different means of consumption.”
In addition, Yglesias argues, a tax would pick up some revenue from non-New Yorkers. “Soda is a pretty good thing for a large city like New York to be taxing,” he writes, “since a large share of the sodas purchased in New York City on any given day are bought by non-residents but the availability of cheap soda is a not an important driver of NYC employment.”
To be sure, any soda tax would have to be fairly steep to induce people to change their behavior—which is the point, after all. “Each 1 percent increase in the soda tax rate correlated with a 0.003 point drop in Body Mass Index,” reports Sarah Kliff in The Washington Post. But that doesn’t mean it couldn’t work. Kliff points to research by Kelly Brownell of Yale University’s Rudd Center on Obesity, which suggests that a substantial tax of about 15 to 20 percent would reduce soda consumption by 8 percent—a significant amount.
And it’s true that all sales taxes are regressive, hurting the poor disproportionately. But a penny per ounce tax would be a lot cheaper than buying two 16 ounce sodas at $4 apiece at the movies. And the proceeds—which will come from rich and poor, New Yorkers and tourists—can be targeted at programs that benefit the poor—for instance, subsidizing the purchase of healthy food for recipients of food stamps. One could even use the revenue to invest in programs that target obesity, especially among children, such as renovating and improving playgrounds and parks, supporting school and after-school athletics programs, and making improvements to pedestrian and bicycle infrastructure.. The soda ban may have finally made New York liberals realize the slippery slope they have unwisely let Bloomberg start sliding down. As Stewart pointed out, classic New York delicacies such as pastrami sandwiches and desserts from Serendipity are just as unhealthy as sodas. Will Bloomberg go after them next? Defenders of the soda ban respond that just because we can’t ban everything doesn’t mean we shouldn’t ban something. But they are missing the point: I fear the soda ban not because Bloomberg cannot come after my corned beef from Katz’s, but because I fear that he can. There’s a better way. An effort to institute a penny per ounce tax on soda throughout New York State failed in 2010, a victim of powerful industry lobbying. Bloomberg may reason that he has found the next best thing. But in fact, he’s substituting a fundamentally different policy, one that attempts to force people to live their lives as he would prefer them to, rather than merely ensuring the rest of us don’t pay for others’ irresponsible choices. In doing so he has crossed a line he shouldn’t have. Ben Adler is a contributing writer for The Nation and federal policy correspondent for Next American City.
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