Different perspectives on the controversial soda tax – National Consumers League

soda_tax.jpgBy Maureen Chircop, NCL Intern

In 2012, Mayor Michael Bloomberg of New York proposed a tax on sweetened beverages that the New York Court of Appeals struck down. Despite the soda tax’s failure, Mayor Bloomberg believed the tax would improve public health. On June 16, 2016, Philadelphia passed a soda tax bill. Instead of focusing on public health benefits, Philadelphia Mayor Jim Kenney concentrated on the community benefits of the soda tax, which amounts to an extra 1.5 cent on each ounce of soda sold.

Mayor Kenney predicts about $90 million in revenue will be generated by the end of next year. This money will be reinvested into community programs such as universal pre-k, community schools, and recreation centers. Not only do taxes on unhealthy habits work to promote positive public health benefits, but utilizing taxes to fund community programs are good for communities and should be encouraged.

For example, a previous tax that promoted positive public benefits is the federal cigarette tax that was passed in 2009. The law aimed to deter smoking by taxing cigarettes. An article from Fortune states that statistics show a decline in smoking occurs when tobacco taxes are present. The same article explains that “…tobacco taxes and consumption are strongly inversely related.” As the price of cigarettes increased, study after study has shown that smoking numbers have gone down. Therefore, it wouldn’t be surprising that a soda tax can garner similar results.

Opposing the tax, the American Beverage Association (ABA) believes that the positive health benefits are false. The ABA believes that the decline in soda consumption does not result in the decline of obesity. Although not all studies are complete because of the relative novelty of the tax, there are some promising trends. Studies do find a reduction in consumption of sugary beverages as their prices rise. According to a National Institute of Health (NIH) article, a 10 percent tax increase on soda has led to a 8 percent average decrease in consumption.

Despite the evident health benefits, those who oppose the soda tax say it may impact low income families more than middle class individuals. Even though this may be true, low income families reap the most benefits from a soda tax. The New England Journal of Medicine states that, “[H]igher taxes are particularly effective in poorer…groups,” which means that lower income individuals thus have a stronger incentive to curb their soda appetite. In addition, the health benefits are progressive for them.

A related tax that is creating positive public health benefits is the “junk food” tax in Mexico. The tax on junk foods in Mexico includes soda, of which Mexico has the fourth highest consumption rate. Despite contributing factors such as unemployment, marketing strategies, and other minor factors, overall soda consumption went down 12 percent over a year in Mexico.

Improved health is only one of the benefit of the soda tax. The tax can also produce much-sought-after funds for communities. For instance, in Mexico, the “junk food” tax raises $150,000 per month to orchestrate community initiatives to improve the health of the community. Similar to Mexico, Philadelphia politicians want to steer the funds to low-income communities for critical programs such as universal pre-k.

Critics that deny a correlation between taxes and health benefits are not looking at the tax through the correct lens. Yes, a soda tax may produce minimal health benefits, but there are still tangible health effects. Despite critics’ notion that a soda tax may not greatly reduce obesity rates, the revenue garnered from the tax will provide much needed community programs and initiatives that are extremely beneficial to lower income communities. In addition, a soda tax will reap fundamental revenue to invest in future generations of citizens.