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(WCCO) Government often uses the tax code to encourage and discourage certain behaviors. And budget times have state and federal governments looking for money. That combination has renewed interest in the idea of new sin taxes on soda and junk food. But do sin taxes work?

"The research around tobacco has shown that large increases on taxes on cigarettes has been the single most effective policy to reduce tobacco use," said Mary Story, a dietitian and public health professor at the University of Minnesota.

Story published a brief analyzing the impact and effectiveness of sin taxes, concluding that a 10 percent increase in sugar-sweetened beverage prices could cut consumption by 8 percent to 10 percent.

Story also wrote that "a few studies have concluded that, in response to changes in relative prices, some consumers will substitute a healthier beverage for an SSB. For example, a study conducted in 2004 found that increases in SSB prices resulted in small increases in consumption of whole and reduced-fat milk, juice, coffee and tea."

However, tracking the success of sin taxes is difficult. Advocates who are against smoking and alcohol abuse point to tax increases as a strong factor in reducing consumption. The American Lung Association says a 10 percent increase in cigarette taxes is strongly correlated with a 7 percent decrease in youth smoking.

The evidence is less strong with adult smokers, according to Bob Moffitt, of the American Lung Association Minnesota chapter, who tend to not be as price-sensitive as young people.

Smoking rates have been on the decline since 1964, when 42 percent of American adults smoked, according to Business Week Magazine. In November, the CDC reported the smoking rate in Minnesota was at 17 percent, and the U.S. smoking rate was below 20 percent for the first time on record.

But Economist Frank J. Chaloupka, director of the Health Policy Center at the University of Illinois at Chicago, told BusinessWeek that there is no certainty that an obesity tax would have the same impact.

"If you raise the tax on soft drinks, people might just switch to other beverages or foods that are just as high in calories. There isn't an easy alternative to cigarettes," said Chaloupka.

Some experts believe taxing soda by the ounce would be more effective than adding a 3-cent tax per 12-ounce can.

The New England Journal of Medicine released a health policy article by Arkansas' surgeon general, New York City's health commissioner and five national experts on health and economics that suggests a soda tax by amount consumed.

A soda tax would generate tax revenue while discouraging people from consuming extra calories, the authors contend. They cited a series of studies that showed higher rates of obesity and diabetes among women who drank more sugar-sweetened beverages. They argue that a steeper soda tax would borrow the same strategy that helped drive down cigarette smoking while bolstering government revenues.

Soda taxes have not proven politically popular. In New York State, the governor proposed an 18 percent tax on sugared soda, and Pepsi threatened to move its headquarters and 1000 employees out of the state. The proposal has been dropped.

Still, a national tax of that amount would generate nearly $15 billion in its first year, said proposal author Kelly Brownell, director of Yale University's Rudd Center for Food Policy and Obesity, according to the Associated Press.

The money could be used for child nutrition and obesity prevention programs, the authors suggested. The tax also would lead to a yearly 2-pound weight loss for soda drinkers, on average, they estimated. For people who drink a lot of soda, it could be more, Brownell said.

(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)

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