Robert Lustig is professor emeritus of pediatrics in the Division of Endocrinology and member of the Institute for Health Policy Studies at the University of California, San Francisco. He is the author of The Hacking of the American Mind: The Science Behind the Corporate Takeover of Our Bodies and Brains
As Canada debates the rationality of a sugar tax in the wake of Chicago rescinding its measure this past week, Canadians must understand the reasons why sugar taxes have passed in Mexico, Britain, South Africa and in other American cities. The case against the tax always boils down to four issues: a) it's regressive against the poor; b) people can make their own choices what to drink; c) it wouldn't work; and d) it's a government money grab. But are these true?
No question that the poor pay more – for everything. But which is more expensive for the poor: sugar or diabetes? We have proven a thousand ways from Sunday that excess sugar is toxic; that is, it is detrimental to health unrelated to its calories, because it gets converted in the liver to fat, which then poisons the liver and makes the pancreas have to work overtime, ultimately burning it out, leading to Type 2 diabetes. I was part of a group of professors who recently showed the United States could save billions annually in medical costs alone by bringing sugar consumption down to USDA guidelines. That money could easily be funnelled back to the poor.
Are people actually free to make their own choices? Not in addiction. The United States and Canada are in the grips of an opioid crisis, killing hundreds of people a day – who, you could say, should know better. Indeed, that's the definition of addiction – despite knowing better, you'll pay whatever is necessary to keep consuming it, to your individual and societal detriment. Which begs the question, is sugar addictive?
The science says so – sugar does the same thing as nicotine and alcohol, by down-regulating the dopamine receptors in the reward centre of the brain. You need more and more to get less and less. And we have an economic barometer to prove it. Hedonic substances are uniformly price-inelastic. Just look at Starbucks coffee – when prices jumped in 2014 because of decreased supply, sales didn't budge an inch.
Soft drinks are the consumable with the second-lowest price elasticity, just up from fast food. Sugar is indisputably the easiest hedonic substance in the history of the world to procure; and despite its ubiquity, one that continues to fetch a higher price, even among the poor . Not surprisingly, the top item purchased in the United States with food stamps is soft drinks.
Do sugary drink taxes work? Raise the price 10 per cent (e.g. with taxes), and consumption drops 7.6 per cent, mostly among the poor as we saw in Mexico; but also in Berkeley, Calif.,, where consumption in an educated population declined even more. And the decline was durable at least over the two years for which we have Mexican data.
Which leaves us with the money grab. When hedonic substances don't exact a cost to society (such as caffeine), we let the market do its job. But when a substance is 1) ubiquitous; 2) toxic; 3) addictive; and 4) results in detriment to society, policy makers can and should step in to regulate. We tax cigarettes and alcohol. But if you're really worried about the money raised by a sugary drink tax disappearing into the "black hole" of the federal coffers, let me propose two helpful suggestions.
The tax is actually three taxes rolled into one. First, you pay for the governmental sugar tariff (in Canada about 8 per cent); then you pay for the ER visits, amputations and dialysis; and third, you'll pay for the soft-drink tax itself. How about ending all food subsidies instead? No economist worth their salt believes in food subsidies – they only distort the market. People say that the price of food would go up. But the Giannini group at UC Berkeley modelled what food would cost; and the only two items that would increase in price are corn (the source of high-fructose corn syrup) and sugar.
Alternatively, how about taxing pop while subsidizing water? And use the money from the tax to fund the subsidy? Incentive plus punishment – carrot and stick, together. A societal nudge – a concept that just won Richard Thaler of the University of Chicago the Nobel Prize in Economics. A zero-sum game for government. And the beverage companies make the water – and you still have to drink? They would be incentivized to do the right thing rather than the wrong thing. No worries about beverage-industry layoffs or market collapse.
Sugar is toxic and addictive, and sugary drinks are just mainlining a toxic substance straight to your liver. Soft drinks are the cheapest thrill that kills. Canada is not immune to the global obesity and diabetes epidemics – rather, you're right in the thick of it. Reduction in sugar consumption is paramount. How you fix the problem is up to you – but at least make your decisions based on science and economics, not on slogans and propaganda.