From governments in Mexico and the United Kingdom, to localities in the United States, lawmakers are using taxation as a means to influence consumer behavior on sugar consumption. Politicians believe that taxes on sugary drinks will improve health outcomes, but the science does not necessarily back that assertion. While policymakers claim to support these taxes under the guise of public health, the real incentive for sweetened beverage taxes is the large amount of revenue that could be used to either bail out localities from their past financial errors or hike current government spending.
Unfortunately, most of the generated revenue comes at the expense of lower-income consumers, small business owners, and workers. Since consumers can switch from sweetened beverages to other sugary items that aren’t taxed, soda taxes are ineffective in lowering obesity and other preventable diseases.
Despite the shaky science and the harmful economic effects of these taxes, the World Health Organization (WHO) fully recommends governments enact taxes on sugary drinks. But in a surprise move earlier this month,the Independent High-Level Commission on Noncommunicable Diseases, an independent panel for WHO, refrained from recommending a tax on beverages to reduce obesity after the panel failed to reach a consensus. This is a welcome and commendable development.
National Taxpayers Union has been a leader on the soda tax issue, and we have frequently stood up against these schemes as they’ve popped up around the country. We continue to contend that the costs of such taxes far outweigh whatever benefit could be gained and urge lawmakers to oppose unfair tax policy.
Last year, NTU led a letter to the Department of Health and Human Services regarding America’s involvement in WHO due to their enthusiasm towards a slew of global taxes. In that letter, we pointed to the fact that “American taxpayers who fund WHO would be appalled that their tax dollars are being used to advocate for higher taxes from an unaccountable international body.” Americans already face similar assaults on their wallets from governments in the U.S. - they don’t need to be funding unaccountable international bureaucrats to be doing so as well.
We also highlighted that “even as WHO claims to be a scientifically grounded organization, its statements in the Roadmap indicate willful ignorance of evidence arguing against harsh excise taxes, which are manifestly regressive, routinely fall short of revenue collection estimates, and are linked to criminal smuggling activities.”
While taxpayers can breathe a slight sigh of relief, the fight against these regressive taxes is certainly not over. The WHO position has not changed and politicians will continue to push for these taxes in the future, underscoring the need for vigilance. We will be sure to update taxpayers regarding any new developments to institute these dangerous taxes in the future.