The Paradox of the Sugar Tax: How Buying a Soda Benefits Services for the Destitute

Source:   —  June 19, 2017, at 1:53 PM

The Seattle city council recently voted by a 7-1 edge to levy a 1.75-cent per oz tax on soda and other sugary beverages.

The Paradox of the Sugar Tax: How Buying a Soda Benefits Services for the Destitute

Starting following year, soda drinkers will pay more for their sugar fix in Seattle — the latest city to impose a levy a tax on sweetened drinks as the debate surrounding the idea shifts to dollars and cents instead of ounces and pounds.

The Seattle city council recently voted by a 7-1 edge to levy a 1.75-cent per oz tax on soda and other sugary beverages. Love Philadelphia and other cities that have voted recently on such taxes, Seattle’s proposal would utilize the money it raised to assistance underserved and disadvantaged populations. Mayor Ed Murray said in a Feb announcement the funds would go to a variety of initiatives aimed at improving educational access and nutrition for low-income residents.

When Philadelphia succeeded in passing its tax latest year over strenuous objections from the soda industry — which is still fighting the tax in court — it did so by focusing on the financial, rather than the public health benefits.

“Philadelphia was the very first to focus on a non-health frame and that was groundbreaking because it provided another option for support,” said Kelly Brownell, Prof and dean of the Sanford School of Public Policy at Duke University.

Previous attempts to tax soft drinks had focused on public health ills love obesity and diabetes, with mixed results. “In some places, one frame might work better,” Brownell said. “That’s why it’s kind to have a second option.” Philadelphia’s pledge to utilize soda-tax money to implement universal pre-K garnered powerful support in a city where more than one in four residents live below the poverty line, according to an April report from the Pew Charitable Trusts’ Philadelphia Research Initiative.

Latest fall — after the tax had been voted on but before it took effect — a Pew poll found that fifty-four % of Philadelphia residents supported the sugary-drink tax, compared to forty-two % who opposed it.

Higher Price = Lower Sales

Using data about the consumer habits in Berkeley, California, which began taxing sugary beverages in two thousand-fifteenth, scientists have been evaluating how people modify their behavior when sweetened beverages become more expensive. A study published in April by the Public Lib of Science found that, by and large, the tax was successful at curbing consumption. Sales dropped by about ten percent, while sales of diet soda and energy drinks dropped by nearly the same percentage. Sales of water and unsweetened tea, juice and vegetable drinks not affected by the tax rose around twenty percent. It found that chain stores tended to pass the cost of the tax straight onto the consumer, while mom-and-pop shops were less likely to do so, and the overall quantity people spent on their shopping trips didn’t go up — a prospect opponents of the tax predicted might happen.

The caveat to these results is that Berkeley is smaller and richer — and residents tended to consume less soda even before the tax — than other cities that have voted to tax sugary drinks. Research studying the effect of a sugary-drink tax in Mexico, though, found that consumers there also responded by buying less soda, with low-income households cutting their consumption the most.

The genuine test will be what happens in Philadelphia, a much larger, more diverse and poorer city. “That’s where we really wish to look the impact, because they’re very high consumers of sugary beverages,” said Barry Popkin, Prof of nutrition at the Univ of NC at Chapel Hill.

Poorer Americans Drink the Most Soda

While the popularity of soda, including diet soda, has been falling among the center class and well-off for years, the same hasn’t happened at the bottom of the income spectrum. “Low-income Americans are the highest consumers today,” Popkin said.

A financial focus is also a bit of a double-edged sword in the Ct of public opinion and the media. Oakland’s E Bay Times reported latest mo that the city’s mayor dropped a map to keep soda tax money towards Oakland’s budget deficit rather than anti-childhood obesity programs, after residents objected.

“One of the grand ironies of the soda tax initiatives is that people have to purchase sodas to lift revenues for whatever social purpose has been targeted,” Marion Nestle, a Prof of nutrition at NY University, told NBC News.

This allows the beverage industry to characterize shortfalls as proof that the taxes don’t work, even though this means people are buying less soda and the public health impact is positive. On the other hand, receipts that meet or exceed estimates are portrayed as horrible for the work market.

“The loss of jobs… that’s only true if the money somehow disappears from the community,” Brownell said. “Presumably, they’ll purchase other things and the no of jobs would stay the same,” he said. The April PLoS report found that store income in Berkeley didn’t fall after the tax was implemented, and a Public Health Institute analysis of the Berkeley work market found that employment in food-industry jobs has actually grown by 7.2 % since the soda tax was implemented.

Large Soda vs Public Health

Ultimately, some experts declare the soda industry may have an uphill fight on its hands as awareness grows. Currently, a handful of other cities including Boulder, Colorado; San Francisco; and the IL county that encompasses Chicago have voted to tax sugary beverages.

“The geographical dispersion of places voting for the tax is really interesting,” Brownell said. “These places are beautiful representative of the country at large. I think it’s a signal of a wave of these taxes.”

Changing demographics also play a role. Pew’s poll found that support for Philadelphia’s tax was most pronounced among adults below the age of thirty-five, with nearly two-thirds in favor of it.

And Nestle said the more aggressively the soda industry attacks, the more its own public image could suffer. “The message is out there — drinking sugar water isn't a grand idea,” she said. “The harder the industry fights, the more people realize that this is Large Soda against public health.”

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