Nov 4 2011
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Tax on Sugar-Sweetened Beverages?

Over the last few years, more and more states and localities have been considering imposing taxes on sugar-sweetened beverages in order to reduce consumption of unhealthy drinks, raise revenue and potentially fund obesity-prevention efforts. In 2010, 13 states introduced sales or excise tax measures, and Colorado and Washington, D.C., eliminated the sales tax exemption such beverages currently receive, according to Julie Greenstein of the Center for Science in the Public Interest. In 2011, 16 states took action.

At the APHA annual meeting this week, Jim Krieger, Chief of Chronic Disease and Injury Prevention in Seattle and King County, cited data showing that a 10 percent increase in prices of sugar-sweetened beverages would result in a 12 percent decline in sales. He noted that this shows that “people’s desire to buy soda is pretty price sensitive.”

Krieger and several other speakers shared their experiences with trying to implement such taxes in major cities across the country. Although none of the speakers had seen direct success in creating a tax, they all had lessons to share about how the beverage industry responded to their efforts, and how others across the country might go about introducing their own taxes.

Washington state imposed a statewide tax on carbonated beverages in 2010. Once members of the beverage industry became aware of the tax, they began to fight it. The industry ended up spending $16 million on a successful state ballot initiative to remove the tax – the most ever spent on a political campaign in the state of Washington. Donald Schwarz of the Department of Public Health in Philadelphia had a similar story to share. In March 2010, the city council proposed a tax of 2 cents per ounce on sugar-sweetened beverages. After months of back and forth on the merits of such a proposal, and intense industry lobbying, at the eleventh hour the tax failed to even come to a council vote. A similar effort in June 2011 also failed.

Still, all of the speakers were optimistic, and they shared lessons about how other localities might successfully enact such a tax.

They noted that emphasizing the connection between sugary drink consumption and obesity, and ensuring the funds raised will go to health or prevention efforts, makes the tax more popular. Several speakers also described recent efforts to change social norms around soda consumption, by removing vending machines from hospitals or public buildings, creating “Soda Free Sunday” pledges, and working with local businesses to emphasize the benefits of a healthier workforce.

While all speakers were realistic, there was also a sense of optimism in the room. Wrapping up his presentation, Krieger said, “Within the next year, a local jurisdiction will pass a tax that will serve as an example for others.”

Tags: Tax policy, APHA, Nutrition, Obesity