A federal judge in the U.S. has just put the law on hold pending an appeal. The law, which was due to go into effect this July, was recently delayed.
The U.K.’s David Cameron announced that a ” sugar tax” would be introduced in April 2018. A tax of 36 cents (24 pence) or 18 pence (18 pence) will be imposed on each liter for high-sugar and low-sugar fizzy beverages, respectively. This tax will not only reduce soda consumption but also raise PS520m in revenue.
Which of these approaches will be more likely to achieve its goal, which is a reduction in weight?
Research in behavioral, economic, and health suggests that a heavy-handed approach is not only more likely to be successful, but it does not go as far as necessary.
An overweight woman sits in Times Square in New York. Lucas Jackson/Reuters
Two perspectives on policy
The differences between the U.S. and U.K. approaches above to the obesity epidemic that is raging both countries reflect more general policy differences: the U.K. tends towards a heavier hand, while the U.S. adopts an easier touch.
Both governments have become concerned about the low level of retirement savings, a result in part of the switch from defined benefit plans to defined contribution plans (an euphemism that means “save your own retirement”). Both countries have passed legislation to encourage employees to contribute by enrolling them automatically in retirement savings plans.
U.K.’s approach is more aggressive. It mandates automatic enrollment rather than encouraging it, as the U.S. does. Employers are required to pay the same amount as their employees. The minimum contribution for both employers and employees is currently 2%, with each paying 50%. However, from 2019, the minimum will increase to 8%, with the employer contributing 3%. Tax relief is provided by the government on contributions. Early withdrawals of gifts are not allowed. There is increasing pressure on the government to raise contribution levels.
The differences between U.S. and U.K. health care systems are more striking but too well known to be described.
Philadelphia, on the other hand, may soon follow the U.K.’s heavier-handed approach. On June 16, the City Council will hold a final vote to decide whether or not to impose a tax of 1.5 cents per ounce on sweetened beverages. This would be the U.S.’s first soda tax.
The war on tobacco has taught us many lessons.
The war against tobacco has taught us valuable lessons on which approaches have worked best to curb smoking, from warnings and taxes to outright prohibitions.
Warning labels alone can reduce smoking, but there are mixed results.
There is more evidence, however, that the combination of warnings, increased taxes, and smoking bans in public places have all had a significant impact.
These posters were placed in cafeterias by a company to encourage employees to drink zero-calorie drinks instead of sugary sodas. It didn’t. It didn’t work.
Labels are not enough.
Is there any scientific backing for San Francisco’s warning about soda? There is little evidence to suggest that calorie labels or warnings regarding added sugars have any effect.
The majority of studies show that merely informing people about the calorie content of food or drink does not have much impact on how much they consume. More creative approaches have not worked, like telling consumers the number of minutes it would take to run on a treadmill in order to burn off a can of soda.
Labeling can have the greatest impact if it has a “Tell-tale Heart Effect. This is when food producers and retailers change their products or increase the nutritional value of current selections in response to feared reactions from consumers, even if these fears are imaginary.
What about a tax on soda?
A soda tax is unlikely to have a significant impact on obesity or even soda consumption.
A soda tax is highly regressive because families with lower incomes tend to drink more soda. The new policy will add yet another tax to activities such as drinking, smoking, and playing the lotto that are most likely to be undertaken by lower-income people.
The overall effect of the tax would be less regressive if it had a disproportionately larger impact on the amount of soda and calories that lower-income individuals consume. Existing research does not provide much hope that a tax on soda will have this effect.