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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’d also add “vegetable” (canola) oil to that list.
It’s more subtle than that. Everything has effects. They will affect you (calories, enjoyment) and the people around you (one more or less cookie for others). There’s probably an optimal, most moral, choice. Though, the magnitude of the decision is probably negligible.
You mean rapeseed(!) oil? lol
Yes, but if I had to choose between soy, corn, and canola, canola is the obviously clear winner.
And, in most cases, one does not posses all the necessary information to accurately determine what the most moral choice would be.
I’ve posted on Ricochet regarding both of these issues, harshly so. I strongly oppose the progressive/socialist wave engulfing Seattle and rippling throughout the state. But I find it difficult to get worked up about a tax on sugary drinks — a product so trivial to anyone’s sense of well-being and positively and indisputably harmful to one’s health.
Do you have a choice in the amount of sugar you consume?
That’s one possibility, though not one I was thinking of. But yes. There is also the issue of whether I’m taking care of my health properly, which is important to whether I can take care of my family responsibilities. There is the issue of whether the next person, who has always gotten the short end of the stick, really likes chocolate chip cookies, and my taking the last one will not help him be a better person.  There’s always something. I don’t know in the abstract what that something will be, but there’s always some moral aspect to the choices we make.
That is true. So as Martin Luther said, “Love God and sin boldly.”
So – one person is not capable of weighing all of the necessary personal information in order to make the appropriate choice – taking into consideration his own body, his own life, his own unique situation, his own preferences and tastes, his needs, his personal beliefs, his geographic setting and work situation, his family and his genetic history…
But you trust a centralized government to come up with a one-size-fits all solution to be mandated by threat of force for the entire country? And you think this will do more good than harm?
Wait – when you see the government stepping in and doubling the cost of a consumer good, thereby interfering with your right to engage in commerce, you don’t get worked up?! The problem may be that you do not enjoy sugary drinks, and are having trouble personalizing it.
Let us suggest that Seattle decided it is super worried about the banana shortage or the plot of honey bees. So it adds $10 to the purchase of any honey bear, and a bunch of bananas that used to cost 79c now costs you $15. It’s all for good, right? Or lets say that Seattle decided that more people should bike to work, and so it closed down the freeways for 2 days per week, requiring that every citizen ride a bicycle or walk. That would be better for your health than the soda tax, no?
Any problem with that? Where do you get riled up about random strangers dictating the way you live your life? If you already live in Seattle, presumably you don’t have a problem with people digging through your garbage to make sure you recycle, or telling you that you cannot use plastic bags… no concern that it doesn’t end there?
Yes, and I consciously exercise that choice. Everyone has that choice, although people typically choose based on impulse (as I did before becoming more fully informed about health and nutrition).
SHHHHH! Don’t give them ideas!
Actually, I’ve posted on those subjects too. And I do object to those policies, and I happen to live outside of Seattle.
But more to your point, I see this tax as no more problematic than a cigarette tax, in fact less so. It is imposed locally and is easily avoidable (as so many commenters have noted). The scenarios you mention in #100 are entirely of a different order. I’m sympathetic to a slippery slope argument, but I don’t think that this new tax makes the slope any more slippery.
That could be a bumper sticker.
Next step: banning soft drink ads?
Always on the lookout for new forms of Orwell-speak, I focused on the term “racial equity analysis” in Jon’s summary. I’m happy to share my research with all in the hope that you’ll be as confused as I am.
Only if you’re actually expecting them to be raisins.
Without control of the internet or radio/airwaves there’s probably not enough leverage to have much impact (billboards are scarce around here). As my fellow commenters have pointed out, tax revenues are a crucial objective of the tax (effectiveness in that regard is yet to be seen), and banning ads won’t accomplish that. But there’s no telling what progressive scheme will be proposed in the Emerald City.
The question isn’t “Do they?” but “Should they be used that way?”
I would settle for a lowering of corn subsidies if those still exist. My understanding was the subsidies were for ethanol fuel which failed. The prevalence of corn grown with government assistance increases the supply, driving down the cost of corn products – such as sodas and many junk food items.
With less production going towards healthier fruits and vegetables, the supply isn’t as high, so the cost of fresh fruit and veggies is higher.
This makes it more difficult for the poor to eat healthy. Which explains the veggie supplement.
However, they aren’t the only things – poor management and organization that goes into meal planning is not usually a trait shared among lower classes, so long shelf life beats out discount ripe produce. I would like to see some gyms start holding meal planning seminars, nutrition guidance with a visiting dietician, or other kinds of community outreach to help people struggling to make good choices have better tools to succeed. Seems like something right up the YMCA alley.
Well, you have to factor in the fact that we’re greatly subsidizing them with our technology and drugs. But yes, the American culture is one where more health care consumption is by definition healthy. This couldn’t be further from the truth. Health care, especially surgery and other interventions, come with risks. In the case of surgery, the effectiveness might be as low as 15%, but people don’t hear that, they have a complaint and something that could theoretically help them so they take on more risk than they realize. In the case of procedures (like detecting cancer), people could be freaked out into doing unnecessary treatments to try to “prevent” something from turning into cancer. Yeah, you may catch a couple extra instances and save someone’s life, but the number you need to treat with often painful and expensive procedures to save that one life can be astronomical.
My wife has had surgery four times. Two were disasters and two had more or less no effect. No one’s cutting on me unless I’m already on my deathbed.
Well, that’s fine as a general principal, but this local soda tax pales into insignificance when stacked up against the existing social policy built into the tax code. Shall we compare the soda tax to the mortgage interest deduction in terms of government dictated behavior modification?
The mortgage interest deduction being popular doesn’t make it a proper use of the tax code.
I’m glad we agree, but we are clearly in the minority. I haven’t seen much outrage about Congress’s timid approach to this issue in the new tax legislation, but no need to pursue that here.
Would you approve of repealing all taxes on cigarettes and alcohol? (…as policy, not personal preference <g>)
Interesting comments, especially interesting in light of the fact pot is legal for recreational use in Washington. Even more interesting because Washington and Oregon may lower their pot taxes because they have found that illegal grow operations have not disappeared, remember that promise. Even more more interesting because pot accounts for more ER visits than all other drugs combined. Oh, and pot is involved in over 80% of workplace accidents, and it is a close second to alcohol when it comes to people seeking addiction help.
You all worry about soda, donuts, and cheeseburgers, I’ll keep an eye on legal pot.
I’d love to see your source material for this (I’m not doubting it, but would like to have it available when making the same argument myself).
The primary health/nutrition problem with cheeseburgers is the bun and the ketchup.
The bun I could live without but the ketchup?