STUMP » Articles » Friday Foolery: How Long Will Centless in Seattle Last? » 26 January 2018, 13:50

Where Stu & MP spout off about everything.

Friday Foolery: How Long Will Centless in Seattle Last?  

by

26 January 2018, 13:50

Seattle Residents Will Outsmart Its Soda Tax

Before we get into this, obviously, if Cook County people can avoid the soda tax, I’m sure the Seattle people can figure this out.

Seattle recently became the latest major city to enact a sweetened beverage tax. In response to the new levy, some retailers have calculated how much of the price is due to the tax, and customers are reeling from sticker shock. One local reporter found that the tax added $10.34 to a case of Gatorade, bringing the final price to more than $26.00.

Other sweetened beverage taxes were beset by problems in 2017. In Philadelphia, tax revenues have fallen short of projections. Cook County has already voted to repeal its tax due to myriad problems with the design, implementation, and deep unpopularity.

Seattle’s tax differs in some particulars, but it has been justified on various grounds at different times, which lends a degree of incoherence to how it was formulated and implemented. The confusion regarding the tax’s intended purpose stems from an unwillingness to acknowledge any trade-offs or adverse consequences that might be associated with it.

One of the justifications for beverage taxes is that customers will respond to price changes by reducing consumption of taxed beverages. The mechanism here is straightforward: tax something to get less of it. If people were to substitute diet sodas or other, less-harmful beverages for sugared sodas, they would be healthier.

The City of Seattle denies that consumers respond to higher prices. On the city government’s website explaining the tax, the Finance & Administrative Services Department takes pains to mention explicitly that the “tax is not collected by the retailer nor is the tax burden intended to fall onto the consumer. The intent of the sweetened beverage tax is to tax the distributions of sweetened beverages into Seattle for retail sale in Seattle.”

If the burden of the tax is supposed to completely bypass the consumer, as unlikely as that might be, what would drive them to substitute away from the unhealthy products that the government is taxing in the first place?

Look, everybody knows the real reason for the taxes is money.

Money Money Money

That revenue has already been allocated to a smorgasbord of causes, ranging from $500,000 for displaced worker retraining, to more than $1 million in tax administration costs, to vouchers to purchase fruits and vegetables. The reliance on revenue from the sweetened beverage tax to fund these initiatives in the future is another competing consideration. If the tax reduces the purchase of affected beverages within the city too much, the funding source for these programs evaporates.

Money that may not materialize.

PHILLY: THE MONEY DIDN’T MATERIALIZE

Beverage Tax First Year Total Falls Below Expectations

PHILADELPHIA (CBS) — The final total for the first year of Philadelphia’s beverage tax is in, and it’s about 15 percent below projections.

The tax brought in $6.5 million in December, bringing the first year receipts to $78.8 million. It was clear several months ago the tax was not going to reach the projected $91 million the city had budgeted, but officials say they were waiting to see a full year’s revenue before making any changes.

Now that those figures are in, city spokesman Mike Dunn says they will revise projections, though he couldn’t say by how much or what impact it will have.

Dunn says, despite the shortfall, the tax has had its benefits.

“$78.8 million has brought 2700 children free, quality pre-K. It has also brought 11 community schools which support 6,000 students. Seventy-one percent of those students are below the poverty level. Those are things that would not have happened had we not had this beverage tax,” said Dunn.

Dunn says the programs have been hampered by the beverage industry suit against the tax. The beverage industry says the receipts show the tax is not a stable, reliable way to fund programs.

Now, some have argued that “Hey, it was supposed to reduce soda consumption — it worked!”, but that’s an assertion without full proof. I am curious as to whether Camden soda sales increased, as well as soda sales in the Philly suburbs.

IMPACT STATEMENT FROM A CANCER PATIENT

I will quote this letter in its entirety:

I hope Seattle City Council members and Mayor Jenny Durkan will read this letter and think about a person they love with all their heart.

My partner of 24 years has incurable cancer, and we need to balance his electrolytes. Unfortunately, with the new soda tax the city added even more stress to a single-income, brokenhearted taxpayer, who, in Seattle fashion, cares for others.

Cancer treatment is bad enough, but my partner is fighting, all the while losing a lot of fluids. Turns out Gatorade is the one thing he can stomach, yet the soda tax has nearly doubled the cost of his liquid “medication.”

Maybe the plan was just drive to another city if you can’t pay the tax?

When I contacted council members and asked if they had thought about the impact of the new tax on cancer patients, I was told no.

So, I ask the council and the mayor to please pretend this scenario is happening in their family, and do the right thing. Amend the Soda Tax to accommodate low-income persons suffering from life-threatening illness.

Bruce Steinberg, Seattle

They really don’t think these things through, do they? They’re always doing it for the “good” of people who can least afford extra taxes. Make them behave better, they say.

NO REALLY, WE’RE NOT TAXING FOR THE MONEY

Without any comment.

Who’s Slurping the Benefits of Soda Taxes?

Local governments. But they’re not just doing it for the money.

…..
Since 2014, there have been nearly a dozen attempts at passing so-called soda pop laws — special excise taxes on soda and other sweetened beverages. To date, such taxes have become law in four localities in California, as well as in Boulder, Colo., Philadelphia, Seattle and the Navajo Nation.

Researchers at Tufts University and Harvard University’s Kennedy School of Government looked into the reason for success and failure. Their findings, co-author Dariush Mozaffarian wrote, “suggest that voters respond to [the promise of] improved health, rather than simply raising revenue for more city spending; while in contrast, inside the city council chamber, politicians appreciate having more money to spend.”

….. “If you’re going to make a policy change, you want the best value for the money, and boy, a sugar-sweetened beverage tax is a really good value for the money,” says Steven Gortmaker, a professor in the Department of Social and Behavioral Sciences at the Harvard T.H. Chan School of Public Health. When Philadelphia was considering its soda pop tax, Harvard researchers ran a study that found the tax could help 36,000 people per year avoid obesity, prevent 2,280 annual cases of diabetes, avert 730 deaths over a decade and save almost $200 million in health spending.

No comment, but an attempt at quantification.

Philadelphia has 1.568 million people.

36,000 people is 2.3% of the population. According to this article from 2016, about 15.4% of the population of Philly is diabetic. 2,280 cases of diabetes would be 0.1% of the population.

According to this preliminary report, there were 14,038 and 14,315 deaths of Philly residents in 2015 and 2016, respectively. 73 fewer deaths per year would be about 0.5% decrease in deaths.

I guess we’ll see over a decade if these numbers move. It helps to have context to see how big these effects are – in a few cases, they really would be substantive.

UNEXPECTED CONSEQUENCE: MORE BOOZE SALES?

I keep bringing up that booze taxes are less than these new sales taxes. To be sure, the base price of alcoholic beverages tends to be higher than soda before you slap on a tax on either, but still.

Alcohol sales are up in Philly. Is the soda tax driving us to drink?

Looking to see what might happen when soft drinks and other sugary beverages are taxed, British researchers found something interesting: People seem to buy less soda and more alcohol.

So, what about Philadelphia, which added a tax to all sweetened drinks a little more than a year ago? The same association appears to be holding here, with residents buying less soda and more booze lately.
….
The British researchers found that when high-sugar drinks cost more, lager sales go up. For medium-sugar drinks, alcohol sales go down. But boosting the price of diet/low-sugar drinks was connected to greater beer, cider, and wine sales.

Low-income households, not surprisingly, proved most sensitive to price increases in sweetened beverages, they concluded.

After the 1.5-cents-per-ounce Philadelphia tax was imposed, sales of soda and other sweetened beverages dropped by 57 percent by volume during the first six months of 2017.

At the same time, there was a 5 percent increase in retail sales of wine and spirits during the correlating fiscal year, compared to the previous one, according to the state Liquor Control Board.

…..
“We can’t speak to what’s happening in Britain, but here in Philadelphia, a whole host of factors could be at play,” said Dunn. There is the growth of tourism, the popularity of beer gardens, and the fact that 2017 was the first full year when some grocery stores could sell beer and wine.

Well, jeez, I think that may be key. (Earlier in the article they talk about marketing & promotions, but ffs, the booze guys do that stuff all the time. There was nothing special about 2017 in that respect.)

SODA TAX TWITTER

Most of the tweets I could find were referencing the stories I found above.

So here are some different ones:







(Great, I’m going to have to add the Phillippines to my soda tax watch?)


I didn’t know that India had an obesity problem. According to this, it looks like it’s pretty location-specific in the country. I think they probably should worry about their states with malnutrition/undernutrition more.


Yeah, probably.