Grattan Institute's Case for Sugar Tax is Not Proven

Duckett and Swerissen (2016) advocated a 40-cent tax per 100g of sugar in sugar-sweetened beverages (SSB), because the tax would reduce the cost burden on the non-obese. Duckett and Swerissen took these third party costs as indices of market failure. However, their distributional analysis is not an appropriate framework for the assessment of economic efficiency. Moreover, they did not quantify the casual mechanisms through which a small weight loss would appreciably lower the health costs and increase the employment of the obese. There may be an economic case for such a tax, but Duckett and Swerissen have not made it.