Cook County, Illinois’ soda tax went “pop” after the county’s Board of Commissioners voted to repeal the county’s penny-per-ounce tax on sweetened beverages, but a bill under consideration by the state House of Representatives preventing future soda taxes from being enacted by local governments is picking up steam.
In July, the county government began collecting an additional tax on all sweetened drinks sold to consumers in Cook County—including soda, iced tea, lemonade, and sports drinks—purchased in bottles or cans or from dispensers.
On October 11, the Cook County Board of Commissioners repealed the tax, rolling back their February decision to create the new tax.
Despite the tax’s defeat, a bill prohibiting county governments from enacting new taxes on soda and other sweetened beverages is gaining popularity in the Illinois House of Representatives.
House Bill 4082 (HB 4082), sponsored by state Rep. Michael McAuliffe (R-Chicago), prohibits Illinois county governments from imposing soda taxes and repeals any existing county soda taxes.
On October 10, state Rep. Dave Severin (R-Benton) signed on as the bill’s seventeenth co-sponsor.
Getting Government Out of the Way
State Rep. Christine Winger (R-Bloomingdale), the bill’s chief co-sponsor, says soda taxes disadvantage businesses selling soda by using government to influence decisions.
“I believe in enterprise and I believe in businesses being the best they can be, but when a tax is placed on a business to give them that disadvantage, that’s just wrong,” Winger said.
“It gets in the way of business,” Winger said. “The gas station that attracts someone by offering a large-size soda for 99 cents can no longer try and do that, and have it be equitable for them. It’s just going to run people out of business for the wrong reasons.”
‘It’s Not the Government’s Job’
Winger says the government should get out of the business of telling people what to drink.
“I think people should make their own decisions, and become educated on proper diets,” Winger said. “It’s not the government’s job to do that.”
‘Voting With Their Dollars’
Chris Lentino, a manager of Chicago outreach with the Illinois Policy Institute, says health-related taxes prompt consumers to take their business to other cities or counties.
“Consumers are voting with their dollars,” Lentino said. “They’re going across the border. A lot of these neighborhoods and suburbs cross the border, or it’s only a five-minute drive across. It’s pretty easy for a lot of these retailers that are on the border to suffer quite a bit.”
Too Many Taxes
Lentino says Chicago and Cook County residents already pay enough taxes on soft drinks.
“In Chicago, there are at least five different taxes on soda or sweetened beverages, and that’s on top of at least 30 other taxes and fees on a daily basis,” Lentino said. “If you’re buying a 20-ounce coke in the city of Chicago, you are levied the sales tax of 10.25 percent, and the city of Chicago levies a 3 percent soft drink tax.
“When you look at the bottom of your receipt, you’re paying 13.25 percent for that 20-ounce Coke, in addition to the penny-per-ounce tax from Cook County,” Letino said. “The effective tax rate of purchasing soda in Chicago is around 40 percent.”