Tax on sweet drinks will cost jobs, encourage cross-border shopping, and it won’t help public health
Today’s Columbian highlighted valid concerns about imposing a soda tax statewide. Patterned after Seattle’s unpopular soda tax, Senate Bill 5371 would impose a 1.75 cent tax per fluid ounce on all sweetened beverages — or $5.04 tax on a 24-can case of soda. The tax is passed onto consumers, hitting low-income people and family grocery bills hardest.
Washington Policy Center has focused on the lack of health outcomes that backers of such a bill promise. Sugar is sugar, whether people get it through a sweetened beverage or a plate of brownies. And taxing a product based on volume, rather than sugar content, exempting milk-based drinks and natural fruit juices with sugar content that rivals soda, as this bill does, makes little sense — other than making the state money on the backs of soda consumers, that is.
Research shows that sugar substitution happens when a soda-tax is imposed, even if soda sales or consumption decrease. In some cases, consumers simply jump to other vices, such as drinking more beer, a 2012 Cornell University study shows.
Studies also show people cross-border shop to avoid the tax.
Heidi Schultz, president of the Washington Beverage Association and co-owner of Corwin Beverage Co., and Don Rhoads, owner of eight convenience stores in Clark County, emphasized that concern to The Columbian. Their county sits minutes away from Portland, Ore. This bill could hit their businesses and employees hard.
Luckily, the paper reports that lawmakers from Southwest Washington on both sides of the aisle “remain unconvinced” about supporting the tax.
Sen. Annette Cleveland, D-Vancouver, chair of the Senate Health and Long Term Care Committee, said, “The beverage tax, in my mind, does place a tremendous burden on an industry that is continuing to reel from the impacts of COVID-19.”
Cleveland also shares our doubts about such a tax resulting in better health outcomes.
Sen. Ann Rivers, R-La Center, told the paper she is against the tax idea, not only because of the tax’s regressive nature and cross-border-shopping concerns, but because the bill’s goals seem contradictory: “It doesn’t make sense to tie health-related commitments to a revenue source that will, by design, diminish if this tax is successful in driving down the consumption of sweetened beverages,” Rivers said.
Seattle has imposed a harsh, regressive soda tax for three years. It has certainly harmed some low-income people's budgets, but it hasn’t delivered health benefits politicians promised. We can expect the same economic harm and zero health benefit if state lawmakers impose this unpopular tax on everyone.