Sugar Taxes on Soda Are a Mixed Bag

Oakland, CA, has been celebrating the drop in purchases of sugar-heavy drinks since introducing a tax on sugar-sweetened beverages (SSBs). While their program has succeeded, it isn’t always the case.

Purchases of soda and sweet beverages dropped 27 percent in two and a half years in Oakland after the tax started. The drop is expected to lead to better health for the city’s people in the next decade. That should lower healthcare costs in the area.

Oakland went with the model of taxing drinks at one-cent-per-ounce of sugar. The more sugar a drink has, the higher the tax is. Berkeley, which has the country’s oldest “soda tax,” saw a drop of more than 50 percent in sales in three years.  

These results suggest SSB taxes can meaningfully improve diet and health and generate substantial cost savings over a sustained period of time, all of which support the case for a national tax on SSBs,” said Dr. Dean Schillinger.

However, the American Beverage Association pushed back against the taxes. Only four municipalities have SSB taxes, and California won’t allow new taxes to go into effect because of pressure from the soda lobby.

The new results from Oakland may help push more taxes through. “The American Beverage Association cornered the California legislature into passing the law barring further SSB taxes in our state,” said Dr. Schillinger. “Voters now have evidence that allowing such taxes can yield significant benefits to society, and we hope that legislators at the state and national level act on these findings.”

Oakland’s SSB tax has been a success story. Other cities have failed. When you look at Philadelphia, you see another story completely. Instead of putting a tax based on one-cent-per-ounce, they gave a blanket amount. Sugar-heavy sodas are taxed. But so are diet sodas and teas. All at the same rate. Unless a drink is water, milk or 100 percent juice, it most likely falls under the tax. That means people don’t reach for a healthier option. Essentially, all drinks went up in price, so the tax doesn’t steer folks to a healthier choice; it’s just a hit to the wallet.

In some ways, it was designed to be a hit to the wallet. While Oakland set out with a plan based purely on public health, Philadelphia wanted the tax as important revenue for education. If you want to fund something with a tax, you clearly aren’t aiming to stop people from buying it.

There’s always the question of whether the government should try to guide these choices for us. When they make taxes making unhealthy foods more expensive, they, in essence, price them out of reach for some people. Making sugar a luxury good isn’t necessarily the best way to reach public health goals.

The results of the Oakland tax are excellent, and it’s great news for the city’s public health. However, we are left wondering what would have happened if they had used warning labels instead. Rather than making food more expensive, you can give people more information about the negative health impacts of the food they are about to eat and let them make their choices.

Banner image: Alexandra Nosova via Unsplash

Related Posts

Thank you! Your submission has been received!
Please check your email to confirm your subscription.
Oops! Something went wrong while submitting the form
By clicking the "Subscribe" button you agree to our newsletter policy