The Seattle City Council approved a proposal by Mayor Ed Murray (D) to impose a new tax on sales of soda, coffee, and other beverages containing sugar and artificial sweeteners.
In May, Murray revised a previously announced soda tax to include “diet” drinks containing non-caloric artificial sweeteners, after city Councilmember Tim Burgess raised concerns about the regressive nature of soda taxes. Burgess cited research studies showing taxes levied on added-sugar drinks took more money from low-income earners and minority demographics than other classes.
“After Murray’s initial announcement, some suggested the exclusion of beverages with artificial sweeteners would be unfair because affluent white people tend to consume more diet drinks,” The Seattle Times reported on April 27.
Grocery stores and other distributors will now be required to remit about $1.18 to the city for every two-liter bottle of soda sold.
Because the tax includes non-soda drinks containing syrup or sweetener, customers at coffee shops such as Starbucks will be required to pay an additional tax of about 21 cents for every “tall” cup of espresso.
Hidden Motive Laid Bare
Jason Mercier, director of the Washington Policy Center’s Center for Government Reform, says including diet sodas and other non-soda drinks in the soda tax shows the tax is not about improving public health.
“The move to tax diet as well as regular soda calls into question the true reason for the tax,” Mercier said. “It’s a syrup tax. Soda is the easiest way to hit it, but it will also affect espresso drinks. Very few people realize that their coffee drinks will be taxed as well.”
Tax First, Appropriate Later
Mercier says Seattle lawmakers want to get the tax money first and appropriate spending later.
“The nexus they’re trying to draw now is that there are problems in the schools, so some of the money will go to educational programs. In education funding, you have local school levies and you have state funding. The city doesn’t have a role in funding schools. They’re trying to do other things related to improving education. It’s not like the money is going to go to kids. They have ideas, but there’s no program in place. How do they draw the direct connection between the revenue and the appropriation?”
Not Even Hiding It
Christopher Snowdon, director of lifestyle economics at the Institute of Economic Affairs, says many lawmakers no longer even pretend these taxes are intended to increase public health.
“Many politicians have given up the pretense that soda taxes are about anything other than raising revenue,” Snowdon said. “The ‘public health’ lobby have been the useful idiots for a political tax-grab.”
Backdoor Taxation
Soda taxes are often used to tap new revenue streams that would otherwise be politically unpopular, Snowdon said.
“Soda taxes give politicians an opportunity to tax people who are normally protected on equity grounds: the poor, the unemployed, students, and so on,” Snowdon said. “His honor’s use of social justice rhetoric to extend the tax to diet drinks is ingenious, but a tax on diet drinks will be cold comfort to people of color who drink sugary drinks.”
