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September 12, 2012

Slate: Don't ban Big Gulps

(Continued)

The study does emphasize that the taxes need to be careful designed to deliver maximum impact: Consumers respond less to taxes if they're not listed in shelf prices and imposed only at the cash register. Cigarette taxes are folded into the price, just as gas taxes are at the pump. Harvard health economist Amitabh Chandra_one of the authors of the hospital-cafeteria study_also points out that, rather than taxing specific items like soda or ice cream, it would probably work better to literally tax fat or sugar content to minimize the chances that consumers would switch to other unhealthy foods.

None of this will be persuasive drink-free-or-die libertarians who oppose all such taxes as paternalistic, interventionist meddling. Nor is it likely to convince beverage manufacturers to reverse their steadfast opposition to any taxes on their drinks. But these studies may help everyone else to see soda, fat, and sugar taxes as a two-for-one of raising government funds and improving the health of Americans at the same time.

- - -

Fisman is a professor of social enterprise and director of the Social Enterprise Program at the Columbia Business School.

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