Nothing like a soda tax to make some strange bedfellows. When you can get Sen. Bernie Sanders (I-VT) and most conservatives to disagree, though for different reasons, you have done something impressive. The new soda tax on Philadelphia has a few problems of its own.
The Philadelphia City Council approved a 1.5¢/ounce soda tax last week. Instead of the traditional proposals involving regular soft drinks, whether they contain high-fructose corn syrup or sugar, the new tax is on regular and diet soda, "juice drinks" with less than 50% fruit juice, sports drinks, and energy drinks.
Our consistent objection to soda taxes has been that high-fructose corn syrup gets huge financial subsidies from the federal government. Eliminating those subsidies will increase the price of sodas in a natural economic matter. If the true goal is to discourage soda consumption, a tax is self-defeating. If you went to the American people and said, "we can save the taxpayers money and improve your health," that would be a winning strategy. But except for too few including your humble narrator, that isn't a part of the national conversation.
The Philadelphia plan is a bit more confusing since artificial sweeteners are targeted. Lemonade is on that list, unless you used fruit juice to sweeten the lemonade. Gatorade isn't a significant problem, but it's on the list. Energy drinks have their own issues, and this tax is one of them.
A 20 oz. bottle of any of these drinks will cost an extra 30¢. A 64-oz. bottle of lemonade will cost 96¢ more. Try explaining that to the mom in the grocery store when she doesn't realize that lemonade counts. Does Trop 50 count for the tax? Not sure Pepsico wants to reveal that secret.
Philadelphia says the tax will go to education funding, though reportedly almost 20% will go to city programs and employee benefits. Yes, $1.6 million of the soda tax money will go to resentence 300 juveniles who were given unconstitutional jail terms of life without parole. They say justice can be cold but not as cold as a ice cold soft drink with extra taxes.
The argument from Sen. Sanders is that a soda tax is regressive on lower-income people. This is where the conservatives disagree, but I'll stick with Sanders on this one. A tax that hurts the poor on top of subsidies to rich companies is a rather insulting economic practice. This tax is not aimed at making people healthier, directly at least. So poorer people are taxed to get pennies for education funding, except the part that isn't.
Those that live close to the suburbs or New Jersey can get around the tax, though mobility is something poorer people struggle with in a large city.
The tax includes so many categories under the umbrella that there isn't a correlation as other proposed taxes are in principle.
Those in favor of soda taxes compare them to taxes on alcohol and tobacco and tout that they will reduce consumption with the ends justifying the means. And we do agree that reducing consumption of sodas is a laudable goal. But as a society, these soda taxes feel like a cheap, lazy way to a solution that feels good rather than being effective.
As we do often on BalanceofFood.com, we aren't going to just complain about a soda tax. Here is our counter proposal:
- Grocery shopping for the poor is often about calories/penny. Create a program, a health incentive to eat whole fruits and vegetables. Remove the temptation for cheap calories.
- Cut high-fructose corn syrup subsidies and not just on soft drinks. That will discourage higher reductions in consumption and not penalize the poor.
- If the playing field is level, and you feel you need an extra tax on sodas, look at Chicago. That city has a 3% tax on retail sales of soft drinks and a 9% tax on the wholesale price of the fountain drink syrup. While we aren't thrilled with these taxes, they are less regressive than the Philadelphia tax.
- All tax money goes to health care and not a way to cut funding for other city departments.
Our food system needs a major overhaul. A regressive soda tax is a small bandage on a minor cut while the large hemorrhaging wound is ignored.
Making me agree with the American Beverage Association and anti-tax conservatives makes me a little squeamish. There are better ways to reduce soda consumption and our energy needs to be spent on those solutions instead of local regressive soda taxes.
photo credit: me