If you thought soda taxes were only propagated amongst academics and busybody politicians in Europe and the United States, think again. Now Mexican President Enrique Peña Nieto is asking Mexico’s Congress to enact a soda tax to the tune of one peso (8 cents) per liter of soft drinks, sports drinks, or any other sugary beverages consumers may wish to buy, couched in promises the levy will fight obesity. ¡Ay caramba!
We have written many times before about the follies of soda taxes. For starters, they have been shown to be ineffective at achieving their supposed purpose of reducing obesity. A recent study found that instituting a tax on sugar-sweetened beverages only decreased overall calorie consumption by less than 14 calories per day – that’s roughly the equivalent of playing frisbee for three minutes. Not exactly what we’d call a “cure” for a supposed “disease.”
In reality, “public health” measures such as these are oftentimes nothing more than thinly veiled efforts by governments to increase tax revenues. Which makes this particular soda tax all the more interesting as it was announced as part of a sweeping tax reform proposal aimed at – you guessed it – boosting government revenues, with the soda tax take estimated at two billion pesos (about $150 million).
Viewing this in light of the fact that poor people are far more likely to purchase sugar-sweetened beverages and thus be affected by price increases, it begins looking more and more like a hidden tax on those most in need.