Today Mayor Ed Murray announced his revised proposal for a tax on sodas and other sugary beverages, which will now also apply to diet soda and similar drinks.
Like cigarette taxes, the soda tax is designed to discourage regular consumption of a product that causes obesity and a host of other health problems. But sugar (and high fructose corn syrup)-based sodas tend to be bought by poor people of color, while diet soda and similar products are typically slurped up by rich and middle-class white people (who already have reliable enough caloric intake that they can afford to spent money on fake sugar). To make sure that this soda tax targets both groups and not just the former—which would be super-duper regressive—the revised proposal also taxes diet beverages. As a consequence of this larger tax base, the proposed rate of taxation has been reduced from two cents per ounce to 1.75 cents per ounce.
The city Budget Office expects the tax to raise $23 million in its first year and less over time as consumers respond to higher prices by switching to non-taxed products like milk, pure juice, and unsweetened tea or coffee. Because no one knows how fast or slow that consumer shift will happen, the city is only counting on bringing in $18 million per year after the first year of taxation.
The money from the tax will be “reinvested” into the same poor, marginalized communities that are most affected by both the tax and the health effects of sugary beverages, according to mayoral staff. The tax revenue raised will be spent on mitigating the racial acheivement gap between white and black Seattle students (which according to a Stanford study published earlier this year is the fifth largest among major U.S. cities), as well as subsidizing healthy food access for low-income residents (for example, via coupons expendible at farmer’s markets).
Alongside the mayor were City Councilmembers Rob Johnson and Tim Burgess. As an example of what the tax is supposed to do, Johnson spoke about children living in the Magnuson Park area. “Those kids are growing up in an environment with access to great schools, great open space, and great transportation—but the only thing that’s open nearby is a 7-11,” he said. “That doesn’t give them a lot of healthy choices.” The tax is intended to fund greater access to healthy alternatives for those kids.
Soda and beverage industry representatives oppose the tax. In a statement released today, the anti-beverage tax group “Keep Seattle Livable for All” said that the tax will kill jobs. “Under the proposal, nearly every beverage in stores would see a sharp spike in costs, with more than 1,000 beverages affected and wholesale prices increasing an average of 60 percent,” the statement read.
The pro-beverage tax group “Seattle Healthy Kids Coalition” also sent out their own press release, which read in part: “It’s time for Seattle to confront obesity, diabetes and other health conditions among our city’s most vulnerable populations,” said co-chairs Dr. Ben Danielson and Estela Ortega. “A tax on sugary drinks will help reduce these health conditions, while also providing a new funding source for education, early learning opportunities and public health programs for Seattle kids.” Thomas R. Frieden, immediate past director of the Centers for Disease Control and Prevention, called sugary drink taxes “the single most effective measure to reverse the obesity epidemic.”
According to the release, a one-year study of a similar tax in Berkely found that “purchases of sugary drinks were down nearly 10 percent, while healthier beverages such as milk and water saw an increase in sales. In analyzing 15 million grocery transactions, no change in consumers’ total grocery bill was recorded and no measureable economic harm to retailers was documented. So rather than reducing the amount of money spent at food stores, consumers are just making healthier choices.”
Given how cheap fountain soda prices already are, the 1.75 cent tax could in some cases double their cost to consumers. Ryan Hopkins, owner of Boss Burgers in White Center, has been critical of the soda tax, going so far as to put up a sign reading “HEY MR MAYOR $5 SODAS? UR POP TAX SUCKS!” outside the restaurant, as reported by Q13.
But that was in response to Murray’s initial proposal. Hopkins says he hasn’t yet had time to carefully review the new proposal, but says that including diet soda and sugary non-soda drinks in the tax is a step in the right direction. “Let’s make it broader,” he says, “rather than doubling the price of just soda pop.” Hopkins emphasizes that the tax should also cover sugary “coffee” drinks like Frappecinos—or “Star-lard drinks,” as he calls them.
I asked Hopkins whether, in general, it’s fair to find an analogy between taxing cigarettes because they cause cancer and other health problems and taxing sugary drinks because they cause obesity and other health problems. “Sure, I guess in general,” he said. “Again, though: what about pizza, birthday cakes, Halloween candy?…We’re choosing [to tax] beverages over pizza and donuts? That’s where I don’t quite understand” the reasoning, he said.
Dr. Jim Krieger, a public health expert at UW, said that part of the rationale behind taxing sodas and sugary beverages is that such beverages are one of the major drivers of sugar-related health problems, leading for example to “elevator rates of obesity.”
At this morning’s press conference, Dr. Krieger (pictured) said there’s no doubt sugary beverages lead to “elevator rates of obesity.” pic.twitter.com/RviXYJNxQy
— Casey Jaywork (@CaseyJaywork) April 27, 2017
While announcing the revised tax proposal, Murray responded to criticism that the tax is regressive (which it technically is):
“To those who say we are resorting to a regressive tax, I say, you know what’s more regressive? You know what’s really taking money out of African American communities? Tolerating an education system that is failing students of color every day, and leaving them without a future and giving them food that will only lead to health problems. Here’s what a progressive income tax looks like. It’s putting $18 million back into our communities every year to build equity for students and promote health for our youth.”
According to CM Burgess, legislation for the proposed tax should move through council over the next one or two months.
This post has been updated.