You might want to think twice before downing that 12-ounce can of Coke. Since sugary drinks can cause a host of health problems, drinking one sugar-filled soda ends up imposing about 10 cents of health costs on others because the resulting medical bills are paid through Medicare, Medicaid or private insurers.
We came to this conclusion while studying what economics says about the benefits of soda taxes, which have been embraced by seven cities across the country.
After Berkeley became the first city in the U.S. to tax sugar-sweetened beverages, in 2014, consumption of such drinks dropped by more than 20%. San Francisco instituted a tax two years later. Nearly 40 countries also have soda taxes.
However, a Chicago-area soda tax was repealed after a series of demonstrations and legal challenges, and several states, including California, have banned cities from imposing new soda taxes. (Editor’s note: Santa Fe voters rejected a soda tax in a 2017 special election.)
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