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Oof. Seattle Sugar Tax Raises Soda Prices by 75 Percent
Seattle residents started the new year with a bad case of sticker shock followed by a sugar crash. A new tax of 1.75 cents per ounce was added to all sweetened beverages sold in the city. The move had public support in June when it was passed 7-1 by the Seattle City Council, but images of regret have been hitting social media as the bill came due Monday.
The prices at an area Costco showed that the tax increases the price of Gatorade by 65 percent and Dr Pepper by 75 percent. To avoid complaints from outraged customers, the discount chain posted an explanation of the steep price increase.
THEY ARE NOT MESSING AROUND WITH THE NEW SUGAR TAX IN SEATTLE pic.twitter.com/xqmj7940y2
— hayden 🌹 (@HaydenBedsole) January 5, 2018
"Why do you hate the government so much?" they ask. pic.twitter.com/rodI1Yl9R2
— Devin Sena (@DevinSenaUI) January 5, 2018
Where will all the new revenue go? Seattle officials expect a $15 million boost in the first year. Since this was sold as a health initiative, $2 million of that will expand a city program that gives fruit and vegetable vouchers to low-income families. Of course, only $400,000 will go to actual vouchers; the other $1.6 million stays with the government for “administrative costs.”
Philadelphia, which enacted a similar tax last year, overestimated the expected revenue. Sales of carbonated soft drinks fell 55 percent inside the city, while sales rose 38 percent in the towns that surround it. It achieved neither the financial goals nor the health goals.
When the Seattle tax was first proposed, a “racial-equity analysis” found that diet beverages should be included since they are more popular among whites and the wealthy people. The politicians shot this down since they know which constituents donate to and vote for them.
Like most of these beverage taxes hitting blue cities, what is and is not included are counter-intuitive. All meal replacement drinks, powdered mixes, and most sugary coffee drinks — such as those found at local mega-company Starbucks — are exempt.
So, if you buy a bottled lemonade, you pay the tax. If you buy Kool-Aid and mix it with water at home, no tax. If you buy a Venti Brown Sugar Shortbread Latte at Starbucks, the tax doesn’t apply. If you get a Tall Brown Sugar Shortbread Frappuccino, which has less sugar, it does.
Local convenience store owner Jong Kim is frustrated, to say the least:
“What can I do? I have no power,” he mused, shrugging his shoulders behind the counter at his store, Summit Foods. “Seattle is too expensive. Everything is a tax.”
Oh well, I’m sure this foolish new soda tax will turn out fine just like Seattle’s foolish minimum wage hike.
Published in Economics
They’re too busy subsidizing sugar growers (at the national level, anyway).
Oh! Where do I vote for you?
I have to question that. As an ER physician for over 30 years the number of ER visits I’ve seen for Marijuana use I can probably count on my fingers. Alcohol is by far the most common drug we see in the ER.
In what way is requiring distributors of soda to pay a $0.21/can tax remotely equivalent to regulating eyewear fashion and personal grooming habits?
If you distribute such a petition, I pledge to you that I will sign it in recognition of your superior debating skills… provided that you set the fines at $0.21.
One item of information. The Frappuccino made with mostly ice and coffee IS taxable under the sugar tax, and the cost will skyrocket within the city limits of Seattle. The only Starbucks drinks that are not subject to the tax are those where milk is the main ingredient. Lattes and hot chocolate that are mostly milk are not subject to the added tax. I like the Frappuccino, and when I go to Seattle I will drop in at Starbucks and check out the prices now, versus last year. Ray will also keep his eye out, as he likes to stop at the Starbucks in the Barnes and Noble at Northgate for his drink after his workout.
Easy, big fella – it’s not all about you.
And no, it’s not a ridiculous idea. Health is one of the primary justifications for laws just like these, as people in gov’t and in this thread have argued.
This assumes that “health care” is one generic thing, which it is not.
That’s really the whole point of the objection. If it was going to stop, it would have already. The fact that these taxes still exist and get brought up again means we’re well past the point of people appreciating the fact that they are becoming slaves to the decisions made by local, state, and national chowderheads, and we spend hours debating whether or not eating too much sugar is bad for you, so if it is, it’s a good tax.
They’re all bad taxes. This gives politicians something to do, which is the opposite of what we want politicians doing.
Unless you want them infesting every nook and cranny of your lives. Then, by all means, endorse more taxes, budget growth, and governmental overreach.
Thanks for all of your intrepid reporting RushBabe.
It assumes nothing of the sort. The point was the marginal dollar spent on healthcare is wasted because it’s just as likely to harm as help. That doesn’t mean any health care falls in this category. There are plenty of places where health care causes enormous benefits. Those spots are pretty obvious, but with massive government subsidies and 3rd party paying that makes the cost at the point of use nearly negligible causes massive unnecessary consumption because of people’s assumptions that “more must be better.”
I need to learn more about this, because traditionally ag subsidies have been used to lower the prices of food for urban consumers who vote. This is not just in the United States, but in every industrialized country and some developing countries as well. The sugar growers want higher prices, of course.
Usually one of the objections to cutting ag subsidies is that it would hurt the urban poor when they do their grocery shopping. But the lobbyists for ag subsidies (and for any other corporate welfare) have always been good at talking out of both sides of their mouths, so I wouldn’t take anything they say at face value.
I am a Taubes-ian and have come to believe that sugar has no place in my diet because of the deleterious effect it has on my body. BUT, the idea that sugar should or can be treated like tobacco to save the public from the evil food industry is just….I dunno…right up their with Drug Warring and Minimum Wage Raising on “noble” causes that will not work and cause more harm than benefit.
Many, if not most, people would be much healthier eating no added sugar, but they have to come to believe that from information + experience.
Taxing carbs has zero chance of slowing down the diabetes. No sugar/easy carb consumption and generous fat consumption is about all that anyone like me can do to stop eating excess carbs and get blood glucose/insulin under control. Some % reduction in carb intake from reduction in Coca Cola portions changes nothing because the carb/insulin cravings will erase that reduction in any 15-minute access to carbs.
Anyway, I find the following interesting:
Gary Taubes’ interviews on EconTalk and with Joe Rogan are very good.
Also, Joe Rogan Experience #1058 – Nina Teicholz
The documentary “Sugar Coated” on Netflix is ok…a good place to start – e.g. showing to my 12 year-old daughter – but, it is too full of these Canadian people (jk…if only there were a reason for Jordan Peterson to speak on the subject ;) ) and really it loses me on three counts: no one said the word “insulin” once and they stuck to generalities and simple illustrations such as force-fed geese = soda-fed kids; they do not address what seems to be our innate desire to consume simple carbs and to pile on fat in order to survive cyclical food shortages, but only blame the food industry for tricking us with added sugar; and they fall into the tobacco paradigm that state action must force industry to stop giving us sugar.
You’re right. I should have said tariffs.
That’s it, exactly! Many years ago my grandfather, when I was still a youngster, gave me his voting philosophy: Any tax, he voted no. Any expenditure, he voted no.
If there had been more like him we would be much better of today.
If you state that the marginal dollar on health care is wasted, and then you say some of it does or doesn’t fall into this category, then you’re missing my point. It can’t be both.
And I completely agree about the 2nd half of the paragraph. But we’re devolving mightily from the discussion at hand, which is really around how much soda can I drink in 30 minutes without having to go to the ER and receive a subsidy for doing so.
Once you give government the power (and the budget) to demonize things, where does it end?
I think you’d best not use your fireplace in Seattle.
If it’s meant to be a deterrent then mission accomplished. economics 101.
Well, the federal government just voted in favor of demonizing states that have high taxes. I was in favor of it, and don’t know that it should end there.
It is equally arbitrary. Revenue generation at the expense of a demographic we do not like. If we have to generate revenue to support the government, why not tax hipsters for being hipsters? I don’t like hipsters. I also don’t like fad dieters, so why not tax fad diets and fake food aversions. Nothing irks me like that idiot at every party who brings her own food because she “doesn’t eat red meat” or has a “gluten intolerance.” So why not tax those people?
At the end of the day, what you’re advocating is nothing more than paying for the government by disproportionally taxing people you don’t like. And where exactly does that stop? These modern-day puritans who say that the government needs to stop people from doing things they disagree with will also rant and rave if a senator says he takes his Catholicism seriously, or if a baker says he’d prefer not to participate in gay weddings. They will happily sue your pants off or get you fired or engage in social media warfare if you suggest that they should embrace your values (and even if you don’t!), but they’re perfectly happy to use government force and authority to make you lose weight… but you don’t lose weight, you just pay more. You don’t stop smoking, you just pay more. But they’re ok with that, because they don’t like you.
Thanks. That was really quite entertaining.
Implied in my first statement. I don’t want to empower the govt. to go after these companies. I just want the general public to be better informed about the health damages these products are doing to us. I know too many people in bad health who over consume soda and junk food yet they think their problem is they don’t exercise enough and eat too much. It’s not how much they’re eating it’s what they’re eating. I’m somewhat evangelical over this because I’ve lost over 60 pounds by cutting out sugar and limiting my carbs.
I live in a city (Salt Lake City) that has a horrible inversion problem during the winter. I have no problem with laws that tell us which days we can use our fireplaces. Feel free to call me a Commie.
If you look at a government intervention, and the externality just jumps out at you like that, I would put it in a whole different category. If you drink a coke, it doesn’t choke all of your neighbors.
I have also seen anti-soda programs that tax or ban sugar free sodas the same as regular sodas, but encourage people to drink fruit juice. That would be pretty ridiculous as an anti-sugar / anti-obesity measure, since fruit juice has lots and lots of sugar. But, of course, that’s not the real motivation.
You’re welcome… though I find it less entertaining and more discouraging. Can you explain to me what the motivation is behind taxing a specific type of sugary drink? If it truly was a health consideration, we would do much better to tax coffee consumption, which is far more sugary and is consumed with equal frequency. But then, we’d do even better to mandate marriage at a young age and also try to eliminate divorce. But we don’t do those things – it’s pretty difficult to determine exactly what makes a person healthy and happy, and on the left, it really does turn into a game of trying to tax everyone but themselves. Easily justified if we can tax cigarettes, alcohol, and soda; or if we can take advantage of addicted gamblers (which strikes me as particularly evil) by establishing state lottery systems.
So at what point, @rico, do you argue in favor of personal liberty?
I’ve tried to make it clear that I don’t view the soda tax as infringing on personal liberty in any meaningful way. In fact, many critics of the tax on this thread criticize the tax for its likely ineffectiveness (as demonstrated in Chicago) because consumers can easily bypass it. I think that they are mostly right.
People in Seattle relentlessly vote into office a Far Left city council, so they are getting it ‘good and hard,’ whether you or I like it or not. But given Seattle’s serious infringements of liberty via ever-tightening central authority (e.g. minimum wage), I can’t get too worked up over this piddling soda tax. At least it offers a small degree of collateral benefit.
Ehh… the problem I have with this logic is a minority of people who live there don’t vote for it and they’re getting it good and hard nonetheless…
How can that be remedied? Progs have got a sizeable majority of the votes.
They can use the Kevin Williamson method and vote with their U-Haul trucks. It’s not a reasonable option for any but a small minority, of course, but that small minority can make a difference.
Let’s hear it for a crazy patchwork of state and local regulation!