Currently browsing posts about: Taxes

I received a notification of the output of a research team at the University of Illinois Chicago (UIC), which did an evaluation of local soda taxes. Its products and resources are available at UIC Policy, Practice and Prevention Research Center (P3RC).

Among these are research briefs summarizing the available evidence base of U.S. sweetened beverage tax studies.

1. Chriqui JF, Pipito AA, Asada Y, Powell LM. Lessons learned from the adoption and implementation of sweetened beverage taxes in the United States: A narrative review. Research Brief No. 119. Policy, Practice and Prevention Research Center, University of Illinois Chicago. Chicago, IL. June 2021.
2. Powell LM, Marinello S, Leider J. A Review and Meta-analysis of Tax Pass-through of Local Sugar-Sweetened Beverage Taxes in the United States. Research Brief No. 120. Policy, Practice and Prevention Research Center, University of Illinois Chicago. Chicago, IL. July 2021.
3. Powell LM, Marinello S, Leider J, Andreyeva T. A Review and Meta-analysis of the Impact of Local U.S. Sugar-sweetened Beverage Taxes on Demand. Research Brief No. 121. Policy, Practice and Prevention Research Center, University of Illinois Chicago. Chicago, IL. August 2021.
4. Marinello S, Powell LM. A Review of the Labor Market Impacts of Local Sugar-Sweetened Beverage Taxes in the United States. Research Brief No. 122. Policy, Practice and Prevention Research Center, University of Illinois Chicago. Chicago, IL. September 2021.
5. Leider J, Oddo VM, Powell LM. A Review of the Effects of U.S. Local Sugar-Sweetened Beverage Taxes on Substitution to Untaxed Beverages and Food Items. Research Brief No. 123. Policy, Practice and Prevention Research Center, University of Illinois Chicago. Chicago, IL. November 2021.

An excellent source of information about soda taxes is available at Healthy Food America

• Research Watch
• Soda tax toolkit
• Compare tax policies
• Map the movement
• Publications

And let’s not forget the Pan-American Health Organization (PAHO)’s terrific report on soda taxes in Latin America.

The Pan-American Health Organization (PAHO) has produced a report on soda taxes in the region.

What’s happening with soda taxes in Latin America is impressive.

Soda taxes, no matter where they are, seem to be doing what they are supposed to:

Latin America is a model for Dietary Guidelines (Brazil) and front-of-package warning labels (Chile).

Wish we could do these things.

A reader in Australia writes that she “just came upon a doozy of an industry-funded paper.”

Title: Sales of Sugar-Sweetened Beverages in Australia: A Trend Analysis from 1997 to 2018, by William S. Shrapnel and Belinda E. Butcher.  Nutrients 2020, 12, 1016; doi:10.3390/nu12041016.

Conclusion: Major, long-term shifts are occurring in the market for non-alcoholic, water-based beverages in Australia, notably a fall in per capita volume sales of SSBs and an increase in volume sales of water. Both trends are consistent with public health nutrition strategies for obesity prevention and suggest that the downward trend in the percentage of dietary energy from added sugars in the Australian diet may be continuing.

Funding and Conflicts of Interest: This analysis was funded by an unrestricted grant from The Australian Beverages Council Ltd. The funders had no role in the design of the study; in the collection, analyses, or interpretation of data; in the writing of the manuscript, or in the decision to publish the results.

So what’s the problem here (besides the usual questions about the accuracy of the “no role” statement)?

The clue comes from an article in Food Navigator Asia: “Not a taxing question: Australian sugar sweetened beverage consumption slumps as obesity rates continue to soar.”

The article quotes a representative of the Beverage Council:

Obesity is multi-factorial, the reason why people become overweight and then obese, is because of the lack of physical activity, a sedentary lifestyle, and also poor diet…a sugar tax alone would not reduce the obesity rates in the country, and was a complex challenge for the government to overcome.  The beverage industry is against a sugar tax, and SSB tax.  The evidence and science behind the effectiveness of a sugar tax is weak.

Comment: The point of this study is to produce evidence against the value of soda or sugar taxes, even though sodas are still the largest source of sugars in Australian diets, and taxes have been shown to reduce consumption in other countries.  When it comes to sugary drinks, less is better.

Just for fun, here’s Healthy Food America’s 2019 map of countries with soda taxes.

We need some good news.   I can offer two items.

1.  Coca-Cola says it will align executive pay to employee pay

Coca-Cola has agreed to “consider the wages it pays all of its employees when setting executive salaries”, for the purpose of aligning them more closely.

This happened as the result of action by the New York State Common Retirement Fund.  The Fund complained that CEO compensation has increased enormously while average wages have made meager gains, to the point where the ratio of CEO to worker compensation has gone up in some instances by nearly 1,400%.

According to Food Dive’s account

Following the agreement with the beverage giant, the fund, which is among the company’s top 50 shareholders with 9,275,387 shares as of the end of 2019, withdrew a shareholder resolution against the company. Coca-Cola agreed to add language to its upcoming proxy statement that said “the compensation approach used to set CEO and (named executive) pay” would be the same one it uses to determine compensation for the broader workforce.

Food Dive points out that

Coca-Cola CEO James Quincey made about $18.7 million in 2019, according to a company spokesman. He was paid $16.7 million in 2018. As of April 1, 2019, Quincey’s base salary was increased 6.7% to $1.6 million “to align (it) with the competitive market,” the beverage company said in a recent proxy.

What this means in practice remains to be seen.  It’s hard to imagine that executives will get a pay cut but maybe employees will see a pay raise?  Let’s hope so.  In any case, cheers to State Comptroller Thomas P. DiNapoli for using the Retirement Fund’s clout.

2.  While it lasted, Chicago’s Soda Tax worked

Chicago passed a soda tax but then rescinded it four months later under pressure from the American Beverage Association, which whipped up public opposition.

Now, a study in the Annals of Internal Medicine, reports that during the months the tax was in effect, the sales volume of taxed sodas dropped by 27% in Cook County relative to St. Louis.  The net decrease was 21% after cross-border shopping was accounted for.

The tax raised nearly $62 million—in those four months—of which nearly $17 million went to a county health fund.

No wonder the American Beverage Association so strongly opposes soda taxes.

• They reduce sales
• They generate funds for health and social purposes

Let’s start the new year with three articles in the New York Times about policies that might not seem to but do bear directly on food politics.

Science Under Attack: How Trump Is Sidelining Researchers and Their Work

 “The disregard for expertise in the federal government is worse than it’s ever been,” said Michael Gerrard, director of the Sabin Center for Climate Change Law at Columbia University, which has tracked more than 200 reports of Trump administration efforts to restrict or misuse science since 2017. “It’s pervasive.”

At the USDA,

Secretary of Agriculture Sonny Perdue announced in June he would relocate two key research agencies to Kansas City from Washington: The National Institute of Food and Agriculture, a scientific agency that funds university research on topics like how to breed cattle and corn that can better tolerate drought conditions, and the Economic Research Service, whose economists produce studies for policymakers on farming trends, trade and rural America.  Nearly 600 employees had less than four months to decide whether to uproot and move. Most couldn’t or wouldn’t, and two-thirds of those facing transfer left their jobs.

The reaction?  In August, Mick Mulvaney, the acting White House chief of staff, appeared to celebrate the departures.

“It’s nearly impossible to fire a federal worker,” he said in videotaped remarks at a Republican Party gala in South Carolina…”What a wonderful way to sort of streamline government and do what we haven’t been able to do for a long time.”

After ICE Raids, a Reckoning in Mississippi’s Chicken Country

The sweeping immigration raids on seven chicken plants in central Mississippi forced hundreds of Latino workers out and opened up jobs for African-Americans.  The article quotes one saying “it felt good to be earning $11.23 an hour, even if the new job entailed cutting off necks and pulling out guts on a seemingly endless conveyor of carcasses.”

How Big Companies Won New Tax Breaks From the Trump Administration

But big companies wanted more…The tax bills of many big companies have ended up even smaller than what was anticipated when the president signed the bill.

The article cites three beverage and food companies—Anheuser-Busch, Coca-Cola and Kraft Heinz—as among those participating in the lobbying blitz.

Such companies also “deployed elaborate techniques that let the companies pay taxes at far less than the 35 percent corporate tax rate.”

Comment

Food politics is a full employment act.  We have plenty of work to do this year to create a healthier, more just, and more sustainable food system.

I was alerted to this story by the FoodNavigator-USA headline: Sugar content in soft drinks cut by nearly a third as voluntary efforts fall way off target.

Public Health England’s latest progress report on the food and drink industry’s sugar cutting efforts reveal significant changes in areas where the sugar tax applies, but a disappointing lack of progress with the voluntary sugar reduction programme.

The Year 2 progress report finds:

• The sugar in taxed drinks affected by the Soft Drinks Industry Levy (SDIL) decreased by 28.8% between 2015 and 2018.
• For non-taxed products, the reduction in sugar was only 2.9%.
• Total sugar increased by 2.6%: the largest increases were for ice cream, candies, sweet spreads, and cookies.

Moral: if you want companies to reduce sugar in their products, tax them.

The American Academy of Pediatrics (AAP)) and the American Heart Association (AHA) have issued a joint statement endorsing soda taxes along with other policies aimed at reducing risks for childhood obesity (the full statement is published in Pediatrics).

The AAP and AHA recommend:

• Local, state and national policymakers should consider raising the price of sugary drinks, such as via an excise tax, along with an accompanying educational campaign. Tax revenues should go in part toward reducing health and socioeconomic disparities.

• Federal and state governments should support efforts to decrease sugary drink marketing to children and teens.

• Healthy drinks such as water and milk should be the default beverages on children’s menus and in vending machines, and federal nutrition assistance programs should ensure access to healthy food and beverages and discourage consumption of sugary drinks.

• Children, adolescents, and their families should have ready access to credible nutrition information, including on nutrition labels, restaurant menus, and advertisements.

• Hospitals should serve as a model and establish policies to limit or discourage purchase of sugary drinks.

Comment:  This action of the AAP is truly remarkable.  In 2015, this Academy was heavily criticized for taking funding from Coca-Cola and, surely not coincidentally, saying little about the need for children to reduce consumption of sugary drinks.  Once exposed, the AAP said it could no longer accept that funding. I did, however, hear an alternative story.  Coca-Cola officials told me that as a result of their transparency initiative, the company would no longer fund the Pediatric, Dietetic, and Family Practice Academies.  It is also hardly a coincidence that now that the AAP no longer takes money from Coke, it is free to promote soda taxes as a useful public health strategy.

The AP reports that the reason the WHO committee on preventing noncommunicable diseases (NCDs) did not recommend soda taxes is that the US representative vetoed the idea.

The Trump administration has torpedoed a plan to recommend higher taxes on sugary drinks, forcing a World Health Organization panel to back off the U.N. agency’s previous call for such taxes as a way to fight obesity, diabetes and other life-threatening conditions.

The move disappointed many public health experts but was enthusiastically welcomed by the International Food and Beverage Alliance — a group that represents companies including Coca-Cola, PepsiCo. and Unilever.

The WHO committee’s report appeared in The Lancet last week.  About soda taxes, it said:

The Commissioners represented rich and diverse views and perspectives. There was broad agreement in most areas, but some views were conflicting and could not be resolved. As such, some recommendations, such as reducing sugar consumption through effective taxation on sugar-sweetened beverages and the accountability of the private sector, could not be reflected in this report, despite broad support from many Commissioners.

It did not include soda taxes in its tax recommendation:

Implement fiscal measures, including raising taxes on tobacco and alcohol, and consider evidence-based fiscal measures for other unhealthy products.

This omission is striking in view of WHO’s strong previous positions on the need to reduce NCDs as part of the agency’s Sustainable Development Goals for 2030, and on reducing sugars and taxing sodas as a means to achieve those goals:

• In 2015, WHO recommended  that sugars be consumed at less than 10% of calories.
• In 2016, WHO recommended taxes on sugary drinks as a way to reduce sugar intake and prevent NCDs.

Again a US veto?  Recall the infamous incident in 2003 when the US blocked the agency from recommending a reduction in sugar intake.

The US should not be holding WHO hostage to public health measures.

WHO should not be caving in to US threats.

NCDs are the major cause of worldwide death and disability and we need worldwide efforts to prevent them.  This calls for cooperation, not blackmail.

Shame.