Friday, February 19, 2010

Adam Smith on fat taxes

Up here in New York, our governor is scrounging in all the couch cushions to find new ways of raising money. One of the more discussed methods is a proposed tax on sugared drinks. The popular backlash is understandable. Adam Smith, however, took a different view:

"Sugar, rum, and tobacco are commodities which are nowhere necessaries of life, which are become objects of almost universal consumption, and which are therefore extremely proper subjects for taxation." [emphasis added]

Homework: Discuss the implications and ethical underpinnings of that statement.

Brownell and Frieden cite that quote first in their article on the subject. They find that taxes of a penny-per-ounce could reduce sugared drink consumption by 10% or more, which they note would be difficult to accomplish with education measures alone.

Hat Tip: Timothy Taylor in a page I tore out of the Journal of Economic Perspectives that refuses to tell me which 2009 edition it was and the website isn't granting me access to find out and this is very frustrating so I'm going to stop being frustrated and let it go at that. It's page 211 on Further Reading, whenever it was.

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