Two recent students on "fat taxes" have emerged in the economics sphere.
Here is the abstract of a paper by Chen Zen and colleagues in the American Journal of Agricultural Economics
A censored Exact Affine Stone Index incomplete demand system is estimated for 23 packaged foods and beverages and a numéraire good. Instrumental variables are used to control for endogenous prices. A half-cent per ounce increase in sugar-sweetened beverage prices is predicted to reduce total calories from the 23 foods and beverages but increase sodium and fat intakes as a result of product substitution. The predicted decline in calories is larger for low-income households than for high-income households, although welfare loss is also higher for low-income households. Neglecting price endogeneity or estimating a conditional demand model significantly overestimates the calorie reduction.Here is an exerpt of an NBER working paper by Harding and Lovenheim
Our main finding is that nutrient-specific taxes have much larger effects on nutrition than do the product-specific taxes we study. However, they do not cost more in terms of consumer utility. While a 20% soda tax reduces sugar purchases by 10.35%, it only reduces overall caloric intake by 4.84%. Taxing packaged meals actually increases slightly overall caloric intake, even though this product group is the unhealthiest per serving. Taxing snacks/candy also has at most small impacts on the purchased nutritive bundle.Two points.
In contrast, taxing nutrients has large impacts on nutrition without producing larger welfare losses than product-specific taxes, largely because of the broad-based nature of these taxes. Among the three nutrient-specific taxes, sugar taxes stand out as particularly effective. A 20% sugar tax reduces sugar consumption by 16.41% while also reducing caloric intake by 18.54% and salt consumption by 9.63%. Consumer indirect utility declines by 2.6% as a result, which is very similar to the utility cost of a soda tax and SSB tax.
First, both these studies show certain kinds of taxes can have some effect on intake (although often in less than anticipated ways). However, even the most effective taxes (in both studies) causes consumer welfare to fall - although these are rarely discussed in dollar terms.
Second, we already have something akin to a sugar tax - farm policies that include production allotments, quotas, and trade restrictions which make sugar 2 to 3 times more expensive in the US compared to the rest of the world. Of course, we also subsidize corn, which makes HFCS relatively less expensive. Here is a nice paper by John Beghin and Helen Jensen on some of the economics of sugar policies.