The cost of enjoying a cold drink on a hot summer day will be going up for consumers in Cook County, Illinois, after a tax hike approved by the Cook County Board of Commissioners in November 2016 takes effect.
Starting July 1, the county government will begin collecting additional taxes 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.
The soda tax will add a 1-cent-per-ounce tax to beverage prices before sales taxes are calculated, adding about 72 cents to the cost of a six-pack of soda.
In November, Cook County Board of Commissioners President Toni Preckwinkle broke a tie vote, saying, “This measure provides important revenue” the county government needs to remain solvent.
Costing Low-Income Households
Ted Dabrowski, vice president of policy for the Illinois Policy Institute, says the soda hits low-income people the hardest.
“The big issue is the moral case that it’s going to tax people with lower incomes more than others, because they consume more sugary drinks than other people,” Dabrowski said. “It’s really a regressive tax.”
‘Just Another Excuse’
Dabrowski says lawmakers use new taxes such as the soda tax to avoid making hard decisions to cut spending.
“This is just another excuse for politicians to find a way to tax people rather than do their job, which is to reform how the government spends,” Dabrowski said.
Soda taxes don’t improve public health, says Erika Davies, a master’s degree fellow for the Mercatus Center at George Mason University.
“As the cost rises, consumers will either continue to do the thing, but now they will be unhealthy and poor, … or they will substitute other, similarly unhealthy things,” Davies said.
Soda taxes are self-contradictory, Davies says.
“There is an inherent hypocrisy in politicians holding the idea that sin taxes increase revenue,” Davies said. “If policymakers push for their consumption tax as a means of raising revenue, this means that policymakers admit their sin tax does not discourage unhealthy behavior. It just makes people worse off, because they are still consuming the thing and they are spending more money doing it.”