That was the title of a short paper I just published (ungated version) in the Canadian Journal of Diabetes. The piece was written in response to a prior article by Buhler et al. arguing that a consensus had been reached on the need for soda taxes. I pointed out that their consensus didn't include any economists.
A few snippets:
More fundamentally, one must ask what conceptual basis is being used to assert that SSB taxes will increase consumers' welfare? Presumably, some consumers already consider health impacts when they choose what to eat and drink. More generally, taxing food or SSBs is analogous to reducing consumers' real income, which almost certainly harms the consumers (9 ). . .If the argument is that people do not understand the risks of SSBs, then the appropriate policy response is information provision, not a tax.
One of the most common assertions is that SSB taxes are required because one individual's choices impose costs on others because of the existence of public healthcare programs. However, forgotten in such claims is the fact that many of the obesity-related costs are private, not public (12). Moreover, the costs to the public health programs are actually transfers among people in an insurance pool, not an economic deadweight loss to society that reduces Pareto efficiency (12).
In sum, Buhler et al (1) are correct that obesity is a complicated and multifaceted issue. So too are the consumption, weight and economic-welfare effects of SSB taxes. SSB taxes often appear to be a simple (if partial) solution for a big problem but, as witnessed by Denmark's recent decision to rescind its versions of the “fat tax,” the consequences and impacts of such taxes are anything but simple.