It’s no secret that politicians like to spend other people’s money. From flashy new sports stadiums and questionable transit projects to public art displays, politicians never run short of ideas for costly new pet projects. However, to fund these extravagant spending sprees, politicians must constantly identify new revenue streams, usually from public tax dollars.
One such scheme involves sugary beverage taxes, where politicians, usually at the city level, propose new taxes on sugary beverages, usually soda, that they say are needed to cut sugar consumption and raise money for health and wellness programs. Such taxes are popular because they typically face little opposition since they are marketed as necessary for improving health outcomes. Unfortunately, health outcomes rarely improve, and the new tax revenue is spent on other city priorities. Worse, low-income Americans tend to carry a disproportionate share of the tax burden since they are statistically more likely to consume sugary beverages than other Americans. As a result, those Americans who can least afford to pay more taxes are those who do.
Over the last few years, sugary beverage taxes have popped up in cities across the nation ranging from Philadelphia and Seattle to Oakland and Washington, D.C. While these taxes vary in size and scope, they are all inherently regressive and frequently fail to meet their expectations.
One recent example comes courtesy of the city of Oakland, where in August, it was reported that just 28 percent of the expected seven million in sweetened beverage tax revenue would go toward community-based organizations as was initially recommended by the city’s Sugar-Sweetened Beverage Community Advisory Board. Despite city residents voting to create the advisory board in 2016 for “making recommendations to the City Council on setting up and/or funding programs that prevent or reduce the health consequences of consuming sugar-sweetened beverages,” city leaders redirected most of the tax revenue to other services.
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Nate Scherer is a policy analyst with the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit us at www.TheAmericanConsumer.Org or follow us on X @ConsumerPal.