U.S blocks panel on sugar tax, and rightfully so

In a new report, the World Health Organization fails to endorse higher taxes on sugar in order to fight noncommunicable diseases. For the last two years, the U.N. body has been calling for even higher sugar taxes, which would lead to reduced consumption and therefore better overall public health. However, the WHO advocates are not only horrifyingly patronizing, they’re also flat-out wrong. The Trump administration seems to have caught on to that, and does not support a regressive and patronizing tax, supported by elitists such as Michael Bloomberg.

Eric Hargan, the U.S. deputy secretary for health and human services, reported that he was the commissioner who blocked advocacy for a levy on sugar on the said panel, arguing it was not clear that imposing taxes on sugary drinks like sodas and fruit juices would improve public health. “Public health advocates” are outraged, because their relationship to science is skewed, and in their mind, whoever does not support their calls for higher taxes must be in the pocket of Big Sugar.

Most of the governmental pushes to limit the consumption of sugar, from the ban on unlimited soda refills in France or soda taxes in Ireland, ignore the real-life examples of the implementation of such punitive taxes. France has had its soda tax since 2012, yet, rising obesity levels and the absence of long-term studies make its effect difficult to determine. As a matter of principle, evaluating the effect of a single tax increase on a particular product on population-wide obesity rates is generally a complicated task. However, the analysis on specific consumption rates is a case study that has been illustrated by Denmark, after the introduction of its “fat tax.”

In October 2011, Denmark’s leading coalition introduced a tax on fattening foods and beverages, such as butter, milks, cheese, meat, pizza, oil, as long as they contain more than 2.3 percent in saturated fat. After 15 months in effect, the tax was repealed by the same parliamentary majority, as the Danes recognized the measure to be a failure. Still, a study in the European Journal of Clinical Nutrition suggests that in the months of the tax, the sale of these foods fell by between 10 and 15 percent. However, this does not account for the stockpiling, or hoarding, effect that the Danes experienced prior to the introduction of the tax, as a study reveals:

[…] this size of this ‘hoarding’ might also be a part of the explanation for the observed decrease in consumption of fats, at least in the period following right after the introduction of the tax.

In fact, when analyzing the effects over the 15 months during which the tax was in effect in Denmark, we find a marginal drop of 0.9 percent of consumption of fatty foods and beverages, which lies within the margin of error.

It stands to reason that prior to the introduction of so-called fat or sugar taxes, the preventative unintended consequences that such policies can have should be examined first. It is to nobody’s advantage if consumers chose low-quality products with the same amount of sugar and fat, only to keep their consumption at the same price.

But further than that, sugar taxes are also regressive taxes. Low-income consumers spend a larger portion of their salaries on their groceries, which makes them more affected by tax hikes on consumption goods. Effectively, a tax on sugar is a tax on the poor. From the side of “public health advocates” (I will continue to use quotation marks until I believe that they actually stand for public health at all), there seems to be no denial of that phenomenon. In fact, billionaire Michael Bloomberg, who heavily restricted the choice of consumers during his time as mayor of New York City, sits on the health panels as WHO global ambassador for noncommunicable diseases.” When referring to the problems of regressive taxation, Bloomberg said this:

There you have it: Tax the poor because they deserve it.

Not only is this point of view factually incorrect, because sugar taxes don’t work, but it is also arrogant and patronizing coming from a person who could afford every luxury in the world.

The Trump administration did the right thing by blocking the sugar tax advocacy of the WHO. Given that this organization operates with a total budget of over $4 billion a year, of which American taxpayers pull the most strings, it is worth considering whether the U.S should end its funding for the WHO entirely.

This article was first published by the Washington Examiner.

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About Bill Wirtz

My name is Bill, I'm from Luxembourg and I write about the virtues of a free society. I favour individual and economic freedom and I believe in the capabilities people can develop when they have to take their own responsibilities.

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