Soda Tax Loses Its Fizz in Chicago

The soda tax we barely knew in Chicago is fading into history. Big soda is celebrating a win. Big soda haters are nursing their wounds. In the face of intense public pressure yesterday, the Cook County Board of Commissioners voted to roll back the county’s tax scheme on December 1. It only went into effect two months ago.

Insights from This Setback?

The possibility of gaining insights from this setback is a bit uncertain. Maybe it’s about unfair taxes, said Commissioner Richard Boykin:

It doesn’t matter whether you tax tea or sugar. Eventually, people say enough is enough.

One can certainly find an echo here of the short-lived fat tax in Denmark. That tax inspired a revolt by Danish bakers and dairy farmers. In January, 2013, just 15 months after introduction, the Danish Parliament repealed it.

It turns out that lots of people eat popular foods and drink popular beverages. When you start vilifying and then taxing those foods and beverages, you make lots of enemies. Friends come and go. Enemies accumulate. Food policy wonks might find it tough to get traction for cherished proposals if they keep making enemies.

Blind devotion to applying experience with tobacco policy might also be a problem. Tobacco taxes were pretty successful for encouraging people to quit smoking. But food is not tobacco. People need food and beverages. They don’t really need tobacco. Food and beverages come in many forms, so people adapt to tax schemes in unpredictable ways. Tax soda and people might start drinking more beer. Just sayin’.

The Movement Continues

The soda tax movement is hardly dead. Berkeley loves its soda tax. The soda tax in Philly has had some bumps along the way, but there’s no prospect for a repeal anytime soon. And, of course, Mexico is finishing its third year with a 10% tax on sugary drinks.

We see lots of projections and estimates about health benefits for these taxes. But the only solid data relates to consumption. Without a doubt, when you tax food and beverages, people consume less of them. Losing sight of the real goal would be a mistake, though. The enemy should not be people who make, serve, and consume food and beverages. The real enemy is disease.

We await real data on the health impact of various food and beverage tax experiments. Until we have it, the fight about food and beverage taxes is all about hypothetical health benefits and real economic costs.

Click here for more from the Washington Post and here for more about the tax in Philly.

Sprite, photograph © Michael Angelo Lucas / flickr

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October 11, 2017