Whether to impose excise taxes on unhealthy food – much like those on tobacco and alcohol – is a matter of continual debate in health-policy circles and state governments. Advocates assert that the increased cost of food with dubious nutritional value would reduce consumption of it. They have an attentive audience in state legislators, who legally must balance their budgets. Opponents argue that such a tax would be regressive, unduly penalizing low-income residents who spend a greater percentage of their household budgets on food.
Most states already tax soda sold in grocery stores and vending machines, but not at a level that significantly affects sales. A study of North Carolina young adults showed that a 10 percent increase in the price of pizza and soda was associated with a 7 percent decrease in calories consumed in soda and 12 percent decrease in pizza.
A U.S. Department of Agriculture analysis estimated that a 20 percent price increase in sugar-sweetened beverages – including some fruit juices – would decrease average consumption by 37 calories a day, lowering the adult incidence of obesity and being overweight by 10 percent each.
Scientists tested the effectiveness of “sin taxes” compared with price discounts for healthier food. A group of volunteers – all mothers – shopped at a simulated grocery store. First, they bought groceries at regular prices. Researchers then imposed taxes of 12.5 percent, then 25 percent on unhealthy items, or they decreased the prices of healthy food comparably. The result: Sin taxes were more effective than discounts in raising the nutritional value of the shopping basket.