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Money Talks from The Economist

Money talks: Should we tax sugar?

Money Talks from The Economist

The Economist

News, Business, Economy, Finance & Economics, Business News

4.41.2K Ratings

🗓️ 1 December 2015

⏱️ 13 minutes

🧾️ Download transcript

Summary

Governments around the world are taxing sugary drinks to help curb obesity, but do so-called 'sin taxes' on the likes of sugar or cigarettes work or has the nanny state gone rogue?

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Transcript

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0:00.0

This is a passenger announcement. You can now book your train on Uber and get 10% back in credits to spend on Uber eats.

0:11.0

So you can order your own fries instead of eating everyone else's.

0:15.0

Trains, now on Uber. T's and C's apply.

0:20.0

Check the Uber app. The Economist.

0:23.0

From The Economist in London, this is Money Talks, a weekly conversation around themes in the worlds of business, finance and economics.

0:35.0

I'm Stan Pagnell, the banking editor.

0:37.0

On Monday, British lawmakers voted in favor of taxes on sugary drinks.

0:42.0

It's all part of a wider set of measures to curb obesity, particularly among children.

0:47.0

To some, the syntaxes, which already exist in the case of alcohol or cigarettes, for example, are a sensible way to curb future health care costs.

0:54.9

Other see them as the Nanny State gone rogue and wonder when compulsory gym classes will be

0:59.1

introduced to keep us all healthy.

1:01.2

But do these taxes work? And if so, what can they teach us about curbing

1:04.9

other undesirable behaviors, whether it be using plastic bags or indeed emitting greenhouse

1:09.4

gases into the atmosphere? Today I'm joined by Sumaya Keynes, our economics correspondent, and

1:15.2

Edward McBride, who edits the finance and economics section. And Sumaya, you have looked at

1:20.4

taxes on sugary drinks specifically, and you found that indeed they have the effect that you would expect them to have.

1:25.9

Yeah so one of the more recent examples is a tax on sugary drinks that was introduced in

1:30.5

Mexico at the beginning of 2014 and the early evidence seems to suggest

1:34.7

that it has been effective in cutting consumption.

1:37.0

So one paper found that consumption fell by around 6% relative to previous trends.

1:43.3

The other concern that people have when thinking about these taxes is that retailers

1:47.1

might not pass on the tax to consumers in the form of higher prices.

...

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