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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
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).
Soda is not pot, or heroin, or oxycontin.
Hey, meet me under the bridge, we’ll get funny (I mean fat) on a 2L of Mountain Dew.
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.)
Ammendment 72,
your mother said to eat right. Get your tush to the Amdt72 Soup Kitchen now.
Not a fan of sin taxes but I’d love to see soda and junk food demonized like we’ve demonized cigarettes. I think we’ve way underestimated the damage sugar and processed foods have done to our collective health. It’s criminal in my mind to have soda machines in public schools.
How about we start by eliminating the billions in subsidies to the corn agribusiness sector? That would raise the price of corn syrup, slimming both our waistlines and our budget deficit.
It would also make our gasoline more pure.
Mistaken post. My bad.
This could be done quite easily: just as they airbrushed the cig out of FDR’s photos, we can use CGI to replace potato-chip consumption in movies with sticks of celery, or green beans. We can also adjust the movie ratings to let people know that potato chips and Coke are consumed without proper contextual condemnation.
Or, we can *not demonize Gatorade.*
I’m all for it.
Dale E. Bredesen, M.D (internationally recognized as an expert in the mechanisms of neurodegenerative diseases such as Altzheimer’s)
Which part of basic economics do liberals just not get?
@mikelachance What part of basic economics do liberals get?
I’m pretty convinced that the effects of the war on drugs are worse than the effects of the actual drugs, if that’s what you’re asking.
Guilty as charged.
Too easy (or too hard).
I would like it very much if every store posted the portion of its prices that go to pay all taxes. After all, it is simple math that 100% of the taxes paid by businesses come out of the pockets of their customers. They don’t have a printing press in the basement, churning out $100 bills. The Democrats like to call any tax cut for businesses a “giveaway to millionaires and billionaires.” Someone should ask Costco customers if they are millionaires and billionaires. Because they are the ones paying the taxes.
In Chicago they also passed a sugar tax. It also made everyone angry, failed to raise the projected revenue and within a few months of it being passed was unpassed (as we literate like to say) because of public pressure. It was a ridiculous tax, one that turned a 5 buck 12 pack into a 8 dollar one. I discovered though that if you order your soda from a grocery delivery service like Peapod the tax was magically absent, presumably because the service bought its sodas outside of Cook County. Also given that the suburbs, Indiana and Wisconsin (another set of Chicago suburbs really) didn’t have the tax half the city could buy its soda’s elsewhere on their own.
I predict repeal will follow shortly in Seattle. Don’t let them get away with it.
As to this war on Sugar and comparisons of it to other specifically taxed and regulated substances like Alcohol and Nicotine. I think the science underlying the comparison is at least a one order of magnitude weaker then in any of those cases. Especially given that the majority of sugar consumed by people is starch which is just as caloric as sucrose. Sure sucrose can be metabolized faster and give you that sugar high, but the reality is that with respect to your body both products ultimately are processed to the same molecules, and feed into the same pathways. Thus a lb of bread and whatever the equivalent is in raw sugar are virtually identical give or take vitamins/fiber. This is why correlation studies between sugar consumption and disease are so much more murky. 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.
Ethanol, nicotine, opiates, etc. while they can have physiological effects basically have no natural role in your physiology. Your body can tolerate certain amounts of them to varying degrees, but their absence will not be missed or felt. The same is not true for sugar.
LOL. Cook County in IL tried this including diet drinks to make it more “fair”. Â Sales in Chicago stores and even some fast food places cratered with people shopping in surrounding counties, and when they shopped, they bought everything, not just soda so the County lost not just the beverage tax but sales taxes on all kinds of food and other items and even gas tax revenue. Â The peasant revolt forced them to back off. It also left a 200 million dollar budget hole on the anticipated revenue they already spent.
The controversial Cook County pop tax is poised to fall flat.
Great opportunity to open a store just outside Seattle city limits. Â Instant millionaire.
I’ll tell you what I see in the photo used in this essay. I see dead polar bears, everyone of those cans when opened releases more carbon dioxide into the atmosphere. It’s time to put environmental wreckers into prison, taxing them is not enough.
Please show me the article in the constitution that addresses this.
Do you smoke? Drink alcohol? Eat red meat? Enjoy fatty foods? Engage in any risky activities? Â I have a tax policy for you.
Well, remove all prepared and processed foods and sugary beverages and ability to buy fast food  from EBT cards for a start.
Pretty much any.
Don’t worry. A year from now they will insist it worked.
Seawriter
I was in Chicago a few years ago, speaking at a very liberal church “thing” (as I recall, having to do with Womyn) and had a side gig teaching death notification at a hospital outside the city. My host very kindly drove me to the hospital. Noting that her gas tank was low, she said she’d wait to address the issue until we were beyond the city limits, since the gas wasn’t taxed as highly.
“But aren’t we tax-and-spend liberals?” I said. “Don’t we approve of taxing fossil fuels?” To her credit, she thought this was funny (and she still bought the gas out in the suburbs).
This sort of thing happens all the time. Liberals insist that “we” have to do something, a law or tax or program is put in place, and those with means (and without any sense of irony or shame) cheerfully circumvent it. My own relatives —T & S liberals all— came up with an elaborate plan involving making my grandmother’s house into some sort of corporation in which we all owned shares, so as to avoid paying the estate tax when the time came. Astonishingly, the IRS did not fall for it! Go figure.
The problem I see with what I call normal progressives/liberals (as opposed to the fanatical activist type) isn’t that they’re wrong about the problem. We do drink too many sodas. We are too fat. (I certainly am—just had to buy new pants yesterday…arrrgh!) It isn’t healthy.
The problem is the belief that the government can “fix” complex, multi-dimensional human behaviors. Even those who are in wholehearted agreement with a government behavior-modification program will nevertheless cheerfully thwart and undermine it themselves.
Henry Hazlitts’ “Economics in One Lesson” is probably in short supply in progressive circles. Or as Thomas Sowell asks “then what?.” Their idea that life is lineal and the variables limited stunt liberals preception of how the real world works. One varible effects another and another, like a large predator/prey model. Some variables are not known at the time the experiment is implemented. In a free society, it still happens, but on smaller localized scales.  How’s Obamacare working out?, or their predictions for the trillion dollar stimulus?
You raise tax on soda in your area, and people stock up out of town. Same thing happened with cig taxes. Then you pass laws making the product bought out of town contraband, and you turn people into criminals.  People who smoke are depicted as losers. It’s all superfical and temporal; in the long run we are all dead.
As a conservative Christian, I do not believe that abusing your body is a good thing, but I know that something somewhere will get you.
You can pass all those good intended laws, and people remain mortal.
I’m all for getting rid of social services, and this is really petty nonsense.
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.
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.”
And, although it’s been said, many times, many ways, this is why I (generally) hate government.
No, it’s not.
There’s a reason why federal, state, and local governments like to tax things whose demand elasticity is less than one – politicians and bureaucracies know they can rely on those revenues. They don’t call them “sin” taxes for nothing.
So, on the one hand, you’ll have politicians preaching about how these things are bad for us (pick one – nicotine, sugar, danishes), but they don’t ban them. No, no, they’re horrible, destructive, expensive things, but we can’t ban them.
But we can make a buck on them, and still feel super-preachy moral about telling us what jerks we are for consuming these things a bunch of chunky losers in gov’t tell us is bad for us while they get reimbursed for their fettucini alfredo at lunch with tax dollars paid for by people who work for a living.
Yeah. It’s a killer idea, duders.