D.C. Has Two Choices When It Comes to Soda Taxes

Since 2015, cities across the U.S. have taxed soda to promote public health, often with disastrous results. While soda taxes show people do consume less of it, the results ultimately don’t pan out, as consumers simply switch their habits to other, equally unhealthy options. To make matters worse, soda taxes fall harder on poor families. As D.C. has become the most recent example to impose a soda tax, it should learn from cities like Philadelphia and Chicago and ditch the soda tax entirely.  

Most recently, D.C passed a soda tax late last year, making it the ninth city in the nation to do so. The law aims to curb obesity while levying taxes for the city with councilwoman, Mary Cheh, saying “we’re hoping that it may signal sufficiently to discourage purchase of soda and sugary drinks.”

While soda taxes certainly are a good attempt at promoting healthy consumption, there are many reasons to doubt if such a tax would work. For instance, a report from the American Consumer Institute reports that after a soda tax was implemented in New Zealand, “methods report reductions in [sugar] intake that are likely too small to generate health benefits and could easily be canceled out by substitution of other sources of sugar or calories.”

A recent example found in Philadelphia, confirms such findings. After Philadelphia passed their own soda tax, a study from Drexel University’s Dornsife School of Public Health found that it had a minimal impact on total consumption, as people often just traveled outside the city to buy soft drinks and avoid the tax all together. In fact, senior author Brent Langellier, PhD, concluded that the law was never “passed for health reasons” but rather to fund the city’s education.

But that’s not all, as Philadelphia’s soda tax have been unkind the city’s poorest residents. As soda purchases are basically even across different income brackets, the taxes borne by each group isn’t. Because a soda tax is based off the purchase price, poorer residents effectively pay a higher percentage of their paycheck, compared to richer residents. In our study we highlight that, “In the lowest income group, spending on SSBs accounted for seven percent of income in 2015, compared to about 0.2 percent of income among the highest-earning households, a 35-fold difference.”

However, the results from Philadelphia’s soda tax shouldn’t come as a surprise. In Cook County (which includes Chicago), for instance, after officials passed their own soda tax, it was found that the policy was hurting low income families the most, as they spent a higher proportion of their income on the tax than compared to the rich. Interesting enough, folks also purchased soda outside the county to avoid the tax, like Philadelphia’s example. After a short four months, the city decided the tax was best left repealed.

While there is a long way to go towards promoting healthy habits, soda taxes are not as effective as they seem. As soda taxes are effective at reducing soft drink consumption, people will often find ways to circumvent the law by buying soda in the surrounding towns, or worse, switch to even unhealthier beverages. Meanwhile, soda taxes hit poor families the hardest while the rich barely notice them. Soda may not be good for one’s health, but taxing it is hardly the best solution to fix the American diet. As D.C. is still a few months into the soda tax, it has two choices: either it can follow Philadelphia’s path and keep it or follow Chicago’s and repeal it.

Hopefully D.C. chooses the latter.

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