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.

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.

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  1. Black Prince Inactive
    Black Prince
    @BlackPrince

    Doctor Robert (View Comment):

    Black Prince (View Comment):

    rico (View Comment):

    Black Prince (View Comment):
    I’m between two minds on this one. This tax seems to be very heavy handed, but there is a obesity/diabetes/fatty-liver disease epidemic in America and the over consumption of sugar is a major contributing factor, if not the outright cause. The incidence of obesity and diabetes is ridiculously high in this county and something has to be done.

    Couldn’t agree more. Given the clear-cut health impact of Americans’ overconsumption of sugar and high-fructose corn syrup, soft drinks seem highly tax-worthy to me. As much as I hate agreeing with Seattle progressives, I think this tax has merit.

    I hate agreeing with progressives too, but I take some comfort in knowing that even a broken clock is right twice a day. To be honest, I think that the over-consumption of sugar is doing more harm to our country than illegal drugs.

    No, not a good idea to tax food for noble goals. The current obesity and type 2 diabetes epidemic is itself the result of government meddling.

    I agree, although I still think that we’d have an obesity and diabetes epidemic without government interference—it just wouldn’t be as bad. The demonization of fat and the substitution of fat with sugar by food producers is absolutely criminal in my mind.

    • #61
  2. Chris Campion Coolidge
    Chris Campion
    @ChrisCampion

    Black Prince (View Comment):

    Eustace C. Scrubb (View Comment):
    And like the rise in the minimum wage, it is a law that will hurt the poor and not the rich. Typical for most progressive policy.

    In America, the incidence of obesity and diabetes is higher in the poor than in the rich…and the poor are least able to afford the associated costs.

    Let’s get them into exercise camps immediately.

    • #62
  3. Chris Campion Coolidge
    Chris Campion
    @ChrisCampion

    rico (View Comment):

    Eustace C. Scrubb (View Comment):
    And like the rise in the minimum wage, it is a law that will hurt the poor and not the rich. Typical for most progressive policy.

    Actually, levying a tax on a consumer product has very little in common with requiring employers and employees to accept a government mandated minimum wage. And to the extent that people (rich or poor) consume less of these products, their health will benefit.

    It is true that this policy is pushed by progressives, but that doesn’t negate these facts.

    What if they consume less health care because it’s so expensive?  Will that impact their health?

    • #63
  4. Black Prince Inactive
    Black Prince
    @BlackPrince

    Kozak (View Comment):

    Black Prince (View Comment):

     

    There is some debate over the addictive/psychoactive properties of sugar, but if you believe that government should intervene in extreme situations where something is causing serious harm to society, then one can make a similar argument about the over-consumption of sugar.

    Please show me the article in the constitution that addresses this.

    Black Prince (View Comment):
    I’m between two minds on this one. This tax seems to be very heavy handed, but there is an obesity/diabetes/fatty-liver disease epidemic in America and the over consumption of sugar is probably a major driver, if not the outright cause. The incidence of obesity and diabetes is so high it is absurd. Maybe this tax isn’t the most effective way of dealing with this problem, but something has to be done.

    Do you smoke? Drink alcohol? Eat red meat? Enjoy fatty foods? Engage in any risky activities? I have a tax policy for you.

    First of all, I don’t believe that eating red meat or fatty foods is unhealthy—I don’t buy into the whole low-fat/no-fat line of thinking. Sure, people engage in risky activities all the time, but the issue here is one of scale and whether the government should play a role (which could be as light-handed as an educational campaign) in the event of some extreme threat to public health (e.g. a deadly virus or a highly addictive drug). Unfortunately, unlike a virus or a drug, obesity and diabetes is a slow motion disaster that can take decades to manifest, but the harm and cost to society is very real.

    • #64
  5. Chris Campion Coolidge
    Chris Campion
    @ChrisCampion

    Sash (View Comment):
    This is what fascism looks like, trying to control others… by taxing what you find sinful behavior.

    It accretes power to the gov’t, both financially and from a choice perspective.

    If government is limiting your choices, you are less free.

    • #65
  6. Black Prince Inactive
    Black Prince
    @BlackPrince

    Chris Campion (View Comment):

    Black Prince (View Comment):

    Eustace C. Scrubb (View Comment):
    And like the rise in the minimum wage, it is a law that will hurt the poor and not the rich. Typical for most progressive policy.

    In America, the incidence of obesity and diabetes is higher in the poor than in the rich…and the poor are least able to afford the associated costs.

    Let’s get them into exercise camps immediately.

    I don’t think that exercise will solve the problem.

    • #66
  7. Chris Campion Coolidge
    Chris Campion
    @ChrisCampion

    rico (View Comment):

    James Lileks (View Comment):

    rico (View Comment):
    The logic of this tax strikes me as similar to that of taxing alcohol or cigarettes. It may help reduce consumption on the margin, and that is a good thing.

    The logic of this argument cedes to the state the power to set prices to influence your behavior. Not to go all paleo on the matter, but I can’t find the relevant clause in the Constitution.

    I’m not sure that levying a tax is the same as setting a price. The taxed entities retain the ability to set their prices, so I don’t see a constitutional question here. I think The Reticulator nails it in #25 in referring to this as a Pigouvian Tax (yeah, I had to google it, but I thought this article provided a great description).

    It doesn’t set the price, it simply increases it.  Or, if you think like a progressive, the additional tax that’s included in the price can substitute for the margin, then it all comes out hunky-dory even-steven.  We increase public health and reduce profitability in one fell swoop.

    Gosh, I love economics.

     

    • #67
  8. Black Prince Inactive
    Black Prince
    @BlackPrince

    Jules PA (View Comment):

    Black Prince (View Comment):

    Patrick McClure (View Comment):

    Black Prince (View Comment):
    I’m between two minds on this one. This tax seems to be very heavy handed, but there is an obesity/diabetes/fatty-liver disease epidemic in America and the over consumption of sugar is probably a major driver, if not the outright cause. The incidence of obesity and diabetes is so high it is absurd. Maybe this tax isn’t the most effective way of dealing with this problem, but something has to be done.

    No, something doesn’t. At least not by the government.

    Well, I’d be the first to admit that the American dietary guidelines over the past 50-odd years is one of the reasons why we’re in such a predicament.

    Skip the mountain dew, let’s meet under the bridge and drink a 2L of non-fat milk, while dunking 2 bags of Oreos. That always makes me feel better. (actually, I prefer whole milk.)

    Whole milk is probably better for you!

    • #68
  9. Chris Campion Coolidge
    Chris Campion
    @ChrisCampion

    One more thing:

    Liberals/Progressives/Dems/Dark Jedi frequently claim that tax rates don’t influence behavior – when they’re talking about marginal tax rates on income.  This helps them justify tax increases.

    But when it comes to sin taxes, or stuff like carbon taxes, they throw that argument out the window and hope nobody notices, because now, apparently, taxes do influence behavior.

    I don’t care either way.  I’m just one of those nutty fellers who appreciates consistency.

    • #69
  10. Kozak Member
    Kozak
    @Kozak

    Black Prince (View Comment):

    Chris Campion (View Comment):

    Black Prince (View Comment):

    Eustace C. Scrubb (View Comment):
    And like the rise in the minimum wage, it is a law that will hurt the poor and not the rich. Typical for most progressive policy.

    In America, the incidence of obesity and diabetes is higher in the poor than in the rich…and the poor are least able to afford the associated costs.

    Let’s get them into exercise camps immediately.

    I don’t think that exercise will solve the problem.

    But you think a tax will?

     

    • #70
  11. Black Prince Inactive
    Black Prince
    @BlackPrince

    Kozak (View Comment):

    Black Prince (View Comment):

    Chris Campion (View Comment):

    Black Prince (View Comment):

    Eustace C. Scrubb (View Comment):
    And like the rise in the minimum wage, it is a law that will hurt the poor and not the rich. Typical for most progressive policy.

    In America, the incidence of obesity and diabetes is higher in the poor than in the rich…and the poor are least able to afford the associated costs.

    Let’s get them into exercise camps immediately.

    I don’t think that exercise will solve the problem.

    But you think a tax will?

    I never said it would.

    • #71
  12. Chris Campion Coolidge
    Chris Campion
    @ChrisCampion

    Black Prince (View Comment):

    Chris Campion (View Comment):

    Black Prince (View Comment):

    Eustace C. Scrubb (View Comment):
    And like the rise in the minimum wage, it is a law that will hurt the poor and not the rich. Typical for most progressive policy.

    In America, the incidence of obesity and diabetes is higher in the poor than in the rich…and the poor are least able to afford the associated costs.

    Let’s get them into exercise camps immediately.

    I don’t think that exercise will solve the problem.

    It was not a serious suggestion.  Or…..was it?

    • #72
  13. Chris Campion Coolidge
    Chris Campion
    @ChrisCampion

    Black Prince (View Comment):

    Jules PA (View Comment):

    Black Prince (View Comment):

    Patrick McClure (View Comment):

    Black Prince (View Comment):
    I’m between two minds on this one. This tax seems to be very heavy handed, but there is an obesity/diabetes/fatty-liver disease epidemic in America and the over consumption of sugar is probably a major driver, if not the outright cause. The incidence of obesity and diabetes is so high it is absurd. Maybe this tax isn’t the most effective way of dealing with this problem, but something has to be done.

    No, something doesn’t. At least not by the government.

    Well, I’d be the first to admit that the American dietary guidelines over the past 50-odd years is one of the reasons why we’re in such a predicament.

    Skip the mountain dew, let’s meet under the bridge and drink a 2L of non-fat milk, while dunking 2 bags of Oreos. That always makes me feel better. (actually, I prefer whole milk.)

    Whole milk is probably better for you!

    Well, let’s just wait for the government to tell us it is before we do anything as drastic as make our own choices.

    • #73
  14. Black Prince Inactive
    Black Prince
    @BlackPrince

    Chris Campion (View Comment):

    Black Prince (View Comment):

    Chris Campion (View Comment):

    Black Prince (View Comment):

    Eustace C. Scrubb (View Comment):
    And like the rise in the minimum wage, it is a law that will hurt the poor and not the rich. Typical for most progressive policy.

    In America, the incidence of obesity and diabetes is higher in the poor than in the rich…and the poor are least able to afford the associated costs.

    Let’s get them into exercise camps immediately.

    I don’t think that exercise will solve the problem.

    It was not a serious suggestion. Or…..was it?

    You tell me…I’m not a mind reader.

    • #74
  15. Canesplitter Inactive
    Canesplitter
    @Canesplitter

    Surprised you didn’t mention Cook County, Illinois (Chicago & burbs) tried this. It lasted about 4 months. Yes, it too included sugar free drinks, iced tea etc. Since my wife works in Lake Cty, and I work close to the border, we just our grocery shopping over the County line. For lunch, I abandoned the closer fast food joints for Lake Cty franchises.  The expected 10s of millions were working out to be a few 100s of thousands at best. I was thinking these did affect inner city kids, and the gatorade culture as they were insulated from the liberty of the county line by several suburbs. After about 2 months, it was dead by mid Oct., but of course would remain in effect until Dec. 1.

    Anything to protect Cook from going purple!

    • #75
  16. Front Seat Cat Member
    Front Seat Cat
    @FrontSeatCat

    Yes, all those administrative costs can be a bear!  Love the comment section – “water is a great beverage”..”Bootleg soft drinks – make some money!  .. Glad Washington is looking out for the health and safety of its citizens, yes sir, the first state to legalize recreational marijuana – oh wait….get hooked and stoned….I get it – increase the munchies cravings ten-fold, then double the cost – sneaky.  This Democratic governor is being looked at as a 2020 presidential contender says the Internet – he can run on tax and more legislation.

    • #76
  17. RightAngles Member
    RightAngles
    @RightAngles

    When your enemy is making mistakes, stand back and let them. They’ll create new Republicans.

    • #77
  18. Black Prince Inactive
    Black Prince
    @BlackPrince

    Sash (View Comment):
    This is what fascism looks like, trying to control others… by taxing what you find sinful behavior.

    I hope I’m not splitting hairs or stating the obvious, but in my mind the over consumption of sugar has nothing to do with sin or morality.

    • #78
  19. The Reticulator Member
    The Reticulator
    @TheReticulator

    Chris Campion (View Comment):

    Black Prince (View Comment):

    Eustace C. Scrubb (View Comment):
    And like the rise in the minimum wage, it is a law that will hurt the poor and not the rich. Typical for most progressive policy.

    In America, the incidence of obesity and diabetes is higher in the poor than in the rich…and the poor are least able to afford the associated costs.

    Let’s get them into exercise camps immediately.

    You can’t have a welfare state without a police state. If sugar taxes worked, they’d be a far less intrusive method than what we’re going to get in their place.

    • #79
  20. The Reticulator Member
    The Reticulator
    @TheReticulator

    Black Prince (View Comment):

    Sash (View Comment):
    This is what fascism looks like, trying to control others… by taxing what you find sinful behavior.

    I hope I’m not splitting hairs or stating the obvious, but in my mind the over consumption of sugar has nothing to do with sin or morality.

    Everything has to do with sin and morality.  Even the choice of whether to take the oatmeal-raisin cookie or the chocolate-chip cookie is a moral choice.

    • #80
  21. Black Prince Inactive
    Black Prince
    @BlackPrince

    The Reticulator (View Comment):

    Black Prince (View Comment):

    Sash (View Comment):
    This is what fascism looks like, trying to control others… by taxing what you find sinful behavior.

    I hope I’m not splitting hairs or stating the obvious, but in my mind the over consumption of sugar has nothing to do with sin or morality.

    Everything has to do with sin and morality. Even the choice of whether to take the oatmeal-raisin cookie or the chocolate-chip cookie is a moral choice.

    Maybe I’m just slow (or not getting the humor), but you’ll have to help me a little here…how is choosing between raisins or chocolate chips a moral choice?

    Edit: I think I get you now…it could depend on how those raisins and chocolate chips were produced (extreme example: slave labor). Is that kind of what you’re talking about?

    • #81
  22. Mike H Coolidge
    Mike H
    @MikeH

    The Reticulator (View Comment):

    James Lileks (View Comment):

    rico (View Comment):
    The logic of this tax strikes me as similar to that of taxing alcohol or cigarettes. It may help reduce consumption on the margin, and that is a good thing.

    The logic of this argument cedes to the state the power to set prices to influence your behavior. Not to go all paleo on the matter, but I can’t find the relevant clause in the Constitution.

    We’ve had taxes to influence your behavior since Alexander Hamilton. Not that he was Mr. Limited Government or Mr. Strict Interpretation of the Constitution. But he wanted (and got) a tax on imports in 1790 to influence Americans to buy domestic goods rather than imported goods, and to encourage the development of home-grown industries.

    This crap shouldn’t be talked about in such a positive light. What you get when the government intervenes is impoverished people, period. It’s just a matter of who’s being impoverished and by how much. In the case of tariffs and trade restrictions, the answer is literally everyone.

    • #82
  23. rico Inactive
    rico
    @rico

    Valiuth (View Comment):
    Sugar is an essential nutrient for your daily life. In some form or another your body needs to produce glucose, and it can only do so by digesting other sugars.

    Both of these statements are false, the first one egregiously so.

    • #83
  24. Mike H Coolidge
    Mike H
    @MikeH

    Chris Campion (View Comment):

    rico (View Comment):

    Eustace C. Scrubb (View Comment):
    And like the rise in the minimum wage, it is a law that will hurt the poor and not the rich. Typical for most progressive policy.

    Actually, levying a tax on a consumer product has very little in common with requiring employers and employees to accept a government mandated minimum wage. And to the extent that people (rich or poor) consume less of these products, their health will benefit.

    It is true that this policy is pushed by progressives, but that doesn’t negate these facts.

    What if they consume less health care because it’s so expensive? Will that impact their health?

    We already consume about double the healthcare than is optimal health wise (at the margin, a procedure is just as likely to help than hurt, and many are much more likely to cause harm) So, yes, consuming less health care is likely to impact their health in a positive way.

    • #84
  25. rico Inactive
    rico
    @rico

    Chris Campion (View Comment):

    rico (View Comment):

    Eustace C. Scrubb (View Comment):
    And like the rise in the minimum wage, it is a law that will hurt the poor and not the rich. Typical for most progressive policy.

    Actually, levying a tax on a consumer product has very little in common with requiring employers and employees to accept a government mandated minimum wage. And to the extent that people (rich or poor) consume less of these products, their health will benefit.

    It is true that this policy is pushed by progressives, but that doesn’t negate these facts.

    What if they consume less health care because it’s so expensive? Will that impact their health?

    It very well could (=bad thing).

    And consuming less sugar or high-fructose corn syrup=good thing.

    • #85
  26. Mike H Coolidge
    Mike H
    @MikeH

    rico (View Comment):

    Valiuth (View Comment):
    Sugar is an essential nutrient for your daily life. In some form or another your body needs to produce glucose, and it can only do so by digesting other sugars.

    Both of these statements are false, the first one egregiously so.

    That’s correct. Your body can run on fat (though the health effects of that are debatable), also protein gets turned into glucose to be used as energy.

    • #86
  27. rico Inactive
    rico
    @rico

    Chris Campion (View Comment):
    One more thing:

    Liberals/Progressives/Dems/Dark Jedi frequently claim that tax rates don’t influence behavior – when they’re talking about marginal tax rates on income. This helps them justify tax increases.

    But when it comes to sin taxes, or stuff like carbon taxes, they throw that argument out the window and hope nobody notices, because now, apparently, taxes do influence behavior.

    I don’t care either way. I’m just one of those nutty fellers who appreciates consistency.

    You’re right. They’re wrong. But in some cases taxes can influence behavior in positive ways.

    • #87
  28. Mike H Coolidge
    Mike H
    @MikeH

    Black Prince (View Comment):

    Doctor Robert (View Comment):

    Black Prince (View Comment):

    rico (View Comment):

    Black Prince (View Comment):
    I’m between two minds on this one. This tax seems to be very heavy handed, but there is a obesity/diabetes/fatty-liver disease epidemic in America and the over consumption of sugar is a major contributing factor, if not the outright cause. The incidence of obesity and diabetes is ridiculously high in this county and something has to be done.

    Couldn’t agree more. Given the clear-cut health impact of Americans’ overconsumption of sugar and high-fructose corn syrup, soft drinks seem highly tax-worthy to me. As much as I hate agreeing with Seattle progressives, I think this tax has merit.

    I hate agreeing with progressives too, but I take some comfort in knowing that even a broken clock is right twice a day. To be honest, I think that the over-consumption of sugar is doing more harm to our country than illegal drugs.

    No, not a good idea to tax food for noble goals. The current obesity and type 2 diabetes epidemic is itself the result of government meddling.

    I agree, although I still think that we’d have an obesity and diabetes epidemic without government interference—it just wouldn’t be as bad. The demonization of fat and the substitution of fat with sugar by food producers is absolutely criminal in my mind.

    It would also hopefully do something about the soybean oil, maybe the least healthy fat, in all processed foods.

    • #88
  29. Black Prince Inactive
    Black Prince
    @BlackPrince

    Mike H (View Comment):

    Chris Campion (View Comment):

    rico (View Comment):

    Eustace C. Scrubb (View Comment):
    And like the rise in the minimum wage, it is a law that will hurt the poor and not the rich. Typical for most progressive policy.

    Actually, levying a tax on a consumer product has very little in common with requiring employers and employees to accept a government mandated minimum wage. And to the extent that people (rich or poor) consume less of these products, their health will benefit.

    It is true that this policy is pushed by progressives, but that doesn’t negate these facts.

    What if they consume less health care because it’s so expensive? Will that impact their health?

    We already consume about double the healthcare than is optimal health wise (at the margin, a procedure is just as likely to help than hurt, and many are much more likely to cause harm) So, yes, consuming less health care is likely to impact their health in a positive way.

    Very interesting point…quality of life and life expectancy isn’t higher in America than in comparable countries that consume (spend?) less (on) healthcare (e.g. Canada, Japan, Europe).

    • #89
  30. rico Inactive
    rico
    @rico

    Mike H (View Comment):

    rico (View Comment):

    Valiuth (View Comment):
    Sugar is an essential nutrient for your daily life. In some form or another your body needs to produce glucose, and it can only do so by digesting other sugars.

    Both of these statements are false, the first one egregiously so.

    That’s correct. Your body can run on fat (though the health effects of that are debatable), also protein gets turned into glucose to be used as energy.

    Bingo! Exactly what I had in mind.

    • #90
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