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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 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.
Let’s get them into exercise camps immediately.
What if they consume less health care because it’s so expensive? Will that impact their health?
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.
It accretes power to the gov’t, both financially and from a choice perspective.
If government is limiting your choices, you are less free.
I don’t think that exercise will solve the problem.
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.
Whole milk is probably better for you!
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.
But you think a tax will?
I never said it would.
It was not a serious suggestion. Or…..was it?
Well, let’s just wait for the government to tell us it is before we do anything as drastic as make our own choices.
You tell me…I’m not a mind reader.
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!
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.
When your enemy is making mistakes, stand back and let them. They’ll create new Republicans.
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.
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.
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?
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.
Both of these statements are false, the first one egregiously so.
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.
It very well could (=bad thing).
And consuming less sugar or high-fructose corn syrup=good thing.
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.
You’re right. They’re wrong. But in some cases taxes can influence behavior in positive ways.
It would also hopefully do something about the soybean oil, maybe the least healthy fat, in all processed foods.
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).
Bingo! Exactly what I had in mind.