Like It or Not, the Era of the “Soda Tax” Has Arrived
Cook County, the heart of the Chicago region in Illinois, has become the latest area to approve a so-called soda tax. Calling this a “bottled, canned or fountain dispensed sweetened beverage tax” would be much more correct, but this just doesn’t roll off the tongue.
Cook County was a bit unique in that it was the county board which approved the new tax by a 9-8 vote. With a population of about 5.2 million, Cook County becomes the most populous municipality to approve such a tax.
Elsewhere, the same decision was reached at the ballot box this week. Voters in San Francisco, Oakland, and nearby Albany, California approved the same penny-per-ounce tax as Cook County, Meanwhile, residents of Boulder, Colorado approved a tax of two cents per ounce.
The above join Berkeley, California and Philadelphia in imposing a soda tax.
Naturally, the industry is not taking this lying down. The American Beverage Association is reported to have spent close to $600,000 just on television ads decrying the tax in the Chicago area alone. This seems like a shocking waste of money considering that the tax wasn’t on the ballot.
Despite the efforts of drink manufacturers (and the supermarket and convenience store industry), soda taxes will soon be on their way to many (if not most) parts of the country. The reasons are clear.
First and foremost, state and local governments are desperate for cash. It appears there are already 21 states in budgetary distress for fiscal year 2017. Going down the chain, there are certainly hundreds (if not thousands) of municipalities in similar situations.
Second, we are getting close to a 10% diabetes rate in the United States. The total cost of diabetes in the US for for 2012 was estimated by the Center for Disease Control to be a shocking $245 billion. The public, naturally, picks up a chunk of that cost.
No, sweetened drinks are not even close to the only culprit in the epidemic of diabetes. Even so, it cannot be denied that they play a role. The Harvard School of Public Health has reported that regular consumption of sugary drinks leads to a 26% greater risk for type 2 diabetes.
Diabetes is far from the only health issue involved. The same study found that men who average a single can or a sugary beverage per day have a 20% greater risk of having a heart attack, and women who indulge at the same level have a 75% higher risk of gout.
Third, we already have evidence that these taxes can reduce consumption. The American Journal of Public Health has already done a study on the tax in Berkeley. Since implementation in 2014, lower income residents (the group who consumes the most sugary beverages on average) were found to have drunk 21% less soda.
This is promising, but it pales in comparison to a recent study which projects the potential impact of a similar tax in Mexico. A study by University of California, San Francisco found that Mexico’s soda tax is on its way to preventing major health problems in 200,000 adults and saving nearly $1 billion in healthcare costs over a single decade.
Call it the nanny state in action (or something more coarse) if you like. The fact is that you will soon be paying a few cents more for a sweet drink.