States tax policies aimed at discouraging the consumption of sugary drinks do not necessarily increase healthful diets, says Scott Drenkard of the Tax Foundation in this week's issue of the Weekly State Tax Report.
According to a 2010 study, when you tax sugar-sweetened beverages, adolescents do consume less of those beverages, but they also take on other sources of calories, resulting in no net change in caloric intake, Drenkard explained. Furthermore, a 2012 study shows that taxing soda led people to consume more beer. For beer-drinking households, this means a response of increasing total caloric intake from a policy that is supposed slim waistlines, Drenkard said.
The take-away from all this: people don't behave in a vacuum, Drenkard said. They don't respond to policy the way nutritionists, or even economists, would like them to. Trying to change behavior with tax policy levers is a fool's game, because consumers are too wily.
The tax code is for raising revenue for government services, not singling out activities we do and don't like and punishing the "bad" ones and subsidizing the "good" ones, according to Drenkard.
Denkard's interview can be read in its entirety here.
In other developments…
Tracking the dramatic changes in abandoned and unclaimed property , a new alert by PwC.
Wrap-Up of Alabama Legislature Actions , a new State & Local Tax Alert by Bradley Arant Boult Cummings LLP
Compiled by Priya D. Nair
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