Soda Tax Considerations


Recently, Childhood Obesity News caught up on the soda tax-related doings in California and Colorado, and learned things about the deep-pocketed beverage industry, its representatives, lobbyists, and allies. When the Center for Science in the Public Interest totaled up the amount of money spent from 2009 to 2016 — on trying to prevent state and local efforts to impose a soda tax — they came up with a grand total of $67 million. During that time, the money has bought victory for the industry in 40 instances where a state or city tried to make a tax happen.

For instance, Albuquerque, New Mexico, made a stab at passing a soda tax, with the very specific purpose of using the money to enroll an additional 1,000 children in preschools. The Bloomberg political machine kicked in $1.1 million to support the measure, but the American Beverage Association spent $1.3 million to prevent it from happening.

The industry lobbyists have some unfortunate facts on their side, gleaned from a federal study performed by the Joint Congressional Committee on Taxes. Their research showed that while the soda tax might cause some people to lose weight, they would not be the people most in need of protection: namely children, teens, and low-income folks.

In examining the soda tax concept, writer Thomas A. Hemphill summed up the major publicly proclaimed arguments on both sides. Necessarily it is a gross simplification, because in every city, the contending parties have their own local concerns and agendas:

A soda tax internalizes the negative externalities of market activities — in this case the “public” health costs of obesity and other diseases — by assessing at least a portion of these costs to consumers or soft drink manufacturers. Soda taxes are also flat taxes, thus regressive in nature, negatively impacting lower-income consumers.

Let’s look at those one at a time. The rationale for a soda tax is that money can be spent on anti-obesity measures and on treating people who have diabetes, etc. In reality, the money often goes to all kinds of things, and the citizens rightfully feel like they have been fleeced.

Wolves in sheep’s clothing

Then there is the argument that the soda industry rolls out when it wants to appear altruistic and righteous. More than the middle class or the wealthy, a soda tax hurts the poor. But apparently this is only true of some low-income people, because SNAP (food stamp) recipients are not taxed for grocery purchases.

A common-sense but probably politically incorrect reaction might be, “Well, fine. If poor people can’t afford soda pop, their health will be the better for it. What’s wrong with that?” Regrettably, several more sub-arguments can then be formulated.

The writer points out that the Berkeley, California, soda tax was the first law of its kind to be created through a referendum, and passed with a 76 percent plurality. He praises San Francisco’s bountiful amount of public information and education because if it works, it should be “encouraged for implementation by other local governments in lieu of a SSB [sugar sweetened beverages] tax.”

Your responses and feedback are welcome!

Source: “Spyware’s Odd Targets: Backers of Mexico’s Soda Tax,”, 02/11/17
Source: “Soda Tax Update: Santa Fe Rejects, Seattle Considers,”, 05/05/17
Source: “PepsiCo: The Soda Tax Is The Opportunity,”, 05/14/17
Source: “Soda taxes: Regressive and unnecessary,”, 02/14/17
Photo by TheToch on Visualhunt/CC BY-SA

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