July 24, 2014 by The Zemanifesto
This November, San Francisco voters will weigh in on a proposed soda tax, which would effectively add two-cents per ounce to the cost of any “sugar-sweetened beverage” with over 25 calories per 12 ounces.
Here’s what won’t be taxed under the law if it passes, according to the San Francisco Office of Analysis :
- “Diet” beverages made with artificial sweetener
- Milk and “milk alternatives”
- 100% fruit and/or vegetable juice drinks
- Baby formula or medical food
- Protein shakes or “meal replacement” drinks
- Drinks “designed for use for weight reduction”
- Alcoholic beverages
- Powdered drink mix for consumers like Koolaid™ (oh yeah)
The reason for the tax most often cited by supporters is improving public health by reducing sugar consumption, and in turn obesity, particularly among children.
The Office of Analysis’ report gives a mixed forecast of how effective the tax will be in achieving that goal. While it does assert that the tax will reduce consumption by just over 30%, it is more reserved on the positive impact on public health via obesity.
From the report:
In order for this tax to have an impact on obesity, increased taxation
would need to result in a reduction in overall caloric intake, and not a substitution to calories from other sources. Some research suggests that some or all of the reduction in caloric intake due to SSB taxes would be offset by increases in consumption of other high calorie food and drinks.
That exact consumer behavior — substituting less expensive high-sugar food items — was observed in at least one study, by the American Journal of Agricultural Economics.
Chen Zhen, the lead research economist on the study, said consumer purchasing patterns for food differ from those for tobacco:
“Instituting a sugary-beverage tax may be an appealing public-policy option to curb obesity, but it’s not as easy to use taxes to curb obesity as it is with smoking… Consumers can simply substitute an untaxed high-calorie food for a taxed one.”
This factor is acknowledged, at least tacitly, by the proposed law’s earmarking of the resulting revenue for programs aimed at improving consumer decisions through health and nutrition education.
This is how the report says the money will get distributed:
- 40% to San Francisco Unified School District
- “Student nutrition services, school-based gardens, nutrition classes, and cooking classes, teacher training and curricular support in nutrition education programs, and after school programs, and expansion and improvement of physical education.”
- 25% to Department of Public Health and the Public Utilities Commission
- “Healthy food access initiatives, drinking fountain and water bottle filling stations, oral health services, chronic disease prevention, and public education campaigns.”
- 25% to Recreation and Park Department
- “Recreation centers, organized sports, and athletic programming.”
An additional 10% is earmarked for grants to nonprofits dedicated to promoting public health, as well as 2% for administrative fees (because bureaucrat math is totally fucked).
These proposed services are intended to increase the potential for obesity reduction, but they also serve as a counterweigh to the uncomfortable truth about the tax — it’s completely regressive.
The consumption of beverages targeted by the law is much higher among poorer and less-educated people, a fact acknowledged (albeit with a major caveat) by the city analysis:
Those below the poverty line also get a much larger share of their daily calories from sugar-sweetened beverages at 9.0%… like any flat tax targeting items that are disproportionately consumed by lower-income people, the tax could be seen as regressive. However, both the programs and services supported by the tax revenue, and the long-term health and economic benefits, will also be primarily realized by low-income groups.
And there’s another problem — the exclusion of diet beverages. There are still uncertainties about the safety of artificial sweeteners like saccharine, aspartame and sucralose, but more germane to the matter at hand, they do not positively impact weight loss.
In fact, some experts contend that the negative impacts of drinking diet soda on weight and health are the same as those from regular soda. This coupled with the distinct likelihood that consumers will start substituting diet soda for regular because of the savings — roughly a quarter per 12 oz. can — calls into serious question the expected benefits of the tax.
The earmarking of funds for a specific purpose, rather than just putting them in the general fund, means at least 2/3 of voters will have to approve the tax for it to go into effect.
And as the Bay Guardian reports, proponents of the law face big-money opposition by the soft drink lobby and a track record of failure in other cities attempting to institute similar laws.
So does the soda tax have the (100%, no sugar-added) juice to overcome those challenges? All shall be revealed in November.