Paying for our sugar high with taxes
ON THURSDAY, we'll hear more details on Mayor Kenney's budget proposals, and we're betting that the aftermath of his address to Council will focus on his reach back into the recent past to enact a tax on sugary beverages - shorthandedly referred to as the "soda tax." The $400 million he projects it will generate will go to funding pre-K and other programs.
ON THURSDAY, we'll hear more details on Mayor Kenney's budget proposals, and we're betting that the aftermath of his address to Council will focus on his reach back into the recent past to enact a tax on sugary beverages - shorthandedly referred to as the "soda tax." The $400 million he projects it will generate will go to funding pre-K and other programs.
We imagine predictable lines of outrage: over the "nanny state" that penalizes people for unhealthy behaviors, over the greedy government that will tax the population until no one is left, over City Hall that ought to live within its means.
We've had a dress rehearsal, after all, in 2010, when Mayor Nutter proposed a similar tax.
Five years ago, Nutter pushed his proposed 2-cents-per-ounce tax on sugary beverages under a health banner that would address obesity. A worthy goal, but since the city can't impose a directed sales tax without approval from Harrisburg, it would have been an excise tax on retailers who sell sugary drinks. Given the accounting headaches of calculating sugared drinks sales, it was assumed retailers would spread the hike across all products, not just sugared soda - ultimately diluting the impact on health.
Kenney's tax would be imposed on distributors, not retailers. So the result - that the price hike is likely to be spread across all beverages - means the actual impact on health is harder to track . . . although in the years since 2010, it's become clearer that diet sodas carry big health risks, too.
That's one of the reasons we could favor the tax this time around. The health problems of obesity, diabetes and other ills from empty calories and chemicals carries a high price for all of us.
Another reason: Back in 2010, Council killed the soda tax and opted instead for a 9.9 percent property tax. Taxing empty calories instead of people's homes strikes us as the lesser of two evils.
The screaming will be loud, and not only from the beverage industry, which is already claiming jobs will be lost. We are addicted to sugar, and the city consumes up to 33 gallons of sugared beverages a year per person. That's according to the Rudd Center, a food policy and obesity center at the University of Connecticut, one of the sources the city has used in researching the impact of sugared beverage taxes. Rudd is a champion of such a tax, and provides handy calculators that measure sugary beverage consumption, as well as projections on how much money a 1-penny-per ounce tax could generate. Kenney's proposal is for 3 cents per ounce, which is higher than any city has imposed.
Still, based on the average consumption of the overly wired cola drinkers in the city, the tax represents about $120 a year. That's if the 3 cents-per-ounce tax passes, hardly a sure thing.
It's hard to buy that the tax will alter consumption significantly. We want sugar, and we'll pay for it. Next time you take in a movie and settle in with your soda and popcorn, consider that large soda for which you paid over $6 cost the theater about 50 cents. That's the high price you pay for entertainment. The soda tax isn't nearly as high as a movie theater price markup, and will pay for worthwhile programs like pre-K.
In the end, how else should we be raising funds to improve the lives of the city's children?