Higher soda prices mean less fat. But do new taxes mean higher soda prices?

The Inquirer highlights a new study that suggests that higher soda prices lead to lower body fat. The study is cast, both by the paper and the author of the study, as potential evidence in favor of the Nutter administration's soda tax proposal.

The study is indeed an encouraging sign for some of the arguments the Nutter administration is making -- the administration wouldn't want to read that higher taxes don't lead to less soda consumption. But it should be pointed out that this study doesn't address what may be the biggest question about Nutter's soda tax plan: Will it actually lead to an increase in the price of soda, especially compared to other foods?

As the Daily News wrote yesterday:

Most taxes designed to encourage healthier behavior (often called sin taxes) are levied at the point of sale, like tobacco. That shows consumers they are paying more for an unhealthy product. Nutter's soda tax wouldn't work this way


Retailers will have to calculate exactly how many drinks they sell, how many of those are sugared, report that amount to the city, then get assessed a 2-cents-per-ounce tax on that amount. That means a new set of accounting tasks, which may not be a problem for big retailers like WalMart, but could be for smaller ones. By the time they have to pass this tax onto consumers, retailers could decide it's easier to spread the hike across all products, not just sugared soda.

This seems to us to be the biggest hurdle the administration has to overcome to make the case for this tax.

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