Study Suggest New Twist on Potential Sin Tax

AMES, IowaThe possibility of a national tax on foods with high sweetener content has been kicked around for several years; however, new research published in the journal Contemporary Economic Policy suggests if the goal of a sin tax" on sweeteners is to reduce calories consumed, lawmakers should consider taxing the ingredients instead of the final product.

Economists at Iowa State University examined how such a tax would best be applied and concluded assessing the tax at the processing stage allows food processors to reduce the amount of caloric sweeteners they put into their products. Processors also will have incentives to use more of the lesser-taxed artificial sweeteners, and less of the higher-taxed sweeteners that are heavy in sugary products.

The economists said they are not advocating for or against any tax, but simply researching how and where a possible sweetener tax would be most effective in the fight to curb the obesity epidemic.

We are saying, Given that you are considering a panoply of tax instruments, and there is a possibility of a soda tax, is there a better way to use that idea?," they said. We wanted to see what the effect of such a tax would be and, alternatively, if you imposed a tax on ingredients, what would be the effect of that."

They concluded the solutions also would raise the price at the store less than a direct tax on the end product, while reducing the calories attributable to the sweetener, according to the study.

Taxing the processing ingredients makes more sense when compared with taxing the end product," they said. You can abate the same number of calories without having consumers face such high prices."

In June, The American Medical Associations (AMA) policy-making House of Delegates on June 9 voted against supporting state taxes on sugar-sweetened beverages to fight obesity, saying it needed more information on the topic.