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Across the country, public health advocates have tried and failed repeatedly to pass versions of a soda tax, a policy that would tack on a cent or more per ounce to the price of soda.
The idea was introduced about a decade ago by public health officials who were looking for ways to curb the consumption of sugary drinks. Excessive soda consumption can often lead to diseases like diabetes and obesity, and low-income people — who generally don’t have as much access to health care — drink disproportionate amounts of it.
But in the years since, the message proponents tried to push — that a tax would discourage people from purchasing soda — has proved politically unpalatable, another symptom of an unwanted nanny state. So far, soda tax proposals have failed in New York state, Washington state, and San Francisco — places generally known to be open to progressive policy proposals. The only American city where it has succeeded so far is Berkeley, California, which tacked on a cent-per-ounce tax to all sugar-sweetened beverages.
But now the policy has an unlikely new proponent: Philadelphia Mayor Jim Kenney, who's looking for revenue to fund his universal pre-kindergarten program, is proposing a soda tax as a core campaign promise. But in pitching his proposal to the public, the mayor is trying something other proponents have not: He’s avoiding talking about public health.
Kenney, who was elected last year, initially opposed the idea of a soda tax when it last came up, while he was a city council member. In all, attempts to tax soda in Philadelphia have already failed twice.
But now that Kenney needs a new source of revenue to pay for his universal pre-K proposal, the tax suddenly looks more enticing. He says a 3-cents-per-ounce tax, the highest such proposal the nation has seen, would raise about $400 million over five years. That’s enough to fund not only universal pre-K but also other projects that badly need funding, like renovations to local libraries and payments to a starved city pension fund.
Kenney is not trying to suggest that he wants people to drink less soda; he hasn’t so much as mentioned the word "obesity." When asked about the potential health benefits of the tax, he says, "There’s really serious health benefits in pre-K."
In other words, this is not a tax to change people’s behavior; it’s a tax to raise revenue for things city residents really want. And soda is an easy target for untapped funds.
"It will probably be a game changer. It will lead a lot of other places to push for a 3-cent-per-ounce tax," said Barry Popkin, a professor of nutrition at the University of North Carolina. Popkin studies soda tax implementation across the US and other countries, and says many places have found success in separating soda tax proposals from their public health implications.
A soda tax was recently included in Britain’s latest budget proposal, as a way of shoring up cash. And several other nations including India have made similar sugary drink tax proposals without input from their respective health ministries.
Popkin says the 2-cent-per-ounce tax that failed to win enough votes in San Francisco was unpopular because it made the tie between the tax and the public health benefit too explicit.
If Mayor Kenney’s tax becomes law, 20-ounce sodas will be taxed at a rate of 60 cents. Assuming that stores will pass the cost of the tax to consumers, that’s enough of a price increase to impact how much soda consumers will buy, Popkin says.
To be precise: It will have a disparate impact on children and low-income adults, who Popkin predicts would purchase anywhere from 20 to 40 percent less soda.
His estimate is backed by mixed evidence. In Mexico, which passed a nationwide soda tax in 2013, the policy worked as expected: Soda prices went up, and consumption fell off.
But in Berkeley, the price of soda appears not to have budged —meaning it’s had little impact so far on consumer behavior. Researchers at the National Bureau of Economic Research who analyzed the early effects of the Berkeley tax after its passage think that’s because Berkeley is simply too small for the policy to work. Store owners are absorbing the cost of the tax themselves because, the researchers think, they’re afraid to bring up prices and drive consumers to stores just over the city border:
Previous research has found cross-border shopping in response to food taxes, even at the state level. In the U.S., the mean distance traveled to shop for groceries is 5.2 miles; even for households with income below $30,000 the average distance traveled to grocery shop is 4.8 miles. In light of this, retailers may not try to shift the tax to consumers, fearing loss of sales. If true, taxes passed at the city level may be less effective at changing prices and consumption than taxes at higher levels of government that are harder to avoid through cross-border shopping.
It’s unclear whether a similar scenario would play out in Philadelphia, or whether the city’s larger size and the more substantial tax, combined, will force consumers to confront rising prices for soda.
But whether or not the soda tax works, Kenney’s reversal on his own position against the tax shows that public opinion is slowly moving in its favor. Soda is now beginning to be seen as a politically appropriate target for taxes — as long as the effects of those taxes don’t appear too coercive.
