Do Soda Taxes Work? Not Unless Retailers Raise Prices

Soda’s empty calories are public enemy number one in the fight against obesity, and taxes on sugary drinks are an increasingly popular tool among local governments hoping to curb consumption.

State and federal taxes on tobacco and alcohol have helped reduce consumption; local governments are simply assuming a soda tax will work in the same way. The idea is that making soda cost more will encourage consumers to drink less of it. But that only happens if retailers pass along the added cost to their customers — something that doesn’t always happen.

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