Potency vs. Weight: Sugary Drinks Tax

Potency vs. Weight: Sugary Drinks

What measuring stick to tax with: weight or strength? The ideal for cannabis is potency, but as this blog often says, we can’t measure THC content accurately enough to tax – not yet, anyway.

A new study, mentioned in the NYT June 2, 2014, suggests that measuring calories of sugary drinks (as opposed to volume, the analog for liquids to weight for dry matter), is the best tax base:

“A new study of how taxes might be used to curb consumption of sugary drinks suggests that applying a tax based on the amount of calories contained in a serving rather than its size would be more effective.

“The study, financed by the Robert Wood Johnson Foundation, which has long advocated taxing sodas and other sugary drinks as part of its efforts to reduce childhood obesity, found that consumption of calories in drinks would drop 9.3 percent if a tax of four-hundredths of a penny for every calorie was added to the price, but fall by just 8.6 percent under a tax of half a cent for each ounce in a can or bottle.”

Calories are easy to measure in a homogeneous liquid.

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Author: patoglesby

From 1982 to 1990, I worked in tax policy for Committees of the United States Congress. In recent years, I was Adjunct Lecturer at UNC-Chapel Hill's Business School and then Adjunct Professor at its Law School.

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