• AEA in the news
  • April 10, 2017

The historic failure of the soda tax

Economists Roy G. and Gladys C. Blakey criticized a national tax on soda passed during World War I, calling it "annoying" and questioning whether it would raise much money.

American Economic Association

The Washington Post dug back 98 years into the archives of The American Economic Review for an article about how a national soda tax passed during World War 1 ultimately failed to raise much revenue for the government’s war chest. The newspaper cited a June 1919 paper by co-authors Roy G. and Gladys C. Blakey about the Revenue Act of 1918. In the paper, the Blakeys called the soda tax “annoying” for taxpayers and said it was “not high enough to discourage wasteful or unnecessary consumption, nor will it bring in much revenue to the government.” The Post notes that the policy was repealed shortly after the war even though the country still faced record debt.