Soda Taxes - Changing America?

A few years back, I introduced the sugary soda debate in Get Me a Huge Soda Please. There is co-morbidity in workers' compensation. One that has attracted discussion and attention is obesity. It turns out that those of us with a few extra pounds can be more challenging to treat following an injury. Months later, New York encountered legal issues with its effort to tax soft drinks, noted in Can I get a Team Gulp with that Please. 

In the last election, voters in four cities were confronted with whether to impose a tax on soft drinks and other "sugar-sweetened beverages. According to CNN, in early November, ballot initiatives were proposed in "San Francisco, Oakland and Albany, California; and Boulder, Colorado." 

The purported drive behind the taxation effort is to discourage consumption. If the cost of the soft drink is increased sufficiently by the taxation, then people will consume less of the soft drink. CNN says that "soda beverages have been associated with an increased risk of obesity, type 2 diabetes, heart disease and possibly heart failure." Proponents claim that their efforts are not directed at revenue from taxes, but at improved health. There are claims that such taxation detriment works in that regard. 

Mexico implemented a similar ten percent tax in 2014. Purportedly, there is empirical proof that the "Mexican soda tax has reduced purchases of sugary beverages." Researchers claim that purchases "decreased by an average of 6%." The study claims that over time this decrease reached "up to 12% by December 2014." So, the increased cost of sugary beverages decreased the demand. I remember this from high-school; cost increases, demand decreases. When a soda tax was passed in Berkley California, Time Magazine reportedly concluded that consumption dropped 20%. Of course, that decrease was in Berkley, not in neighboring communities. 

The Mexican authorities project that "a 10% reduction in sugary beverage consumption among Mexican adults could result in about 189,300 fewer cases of type 2 diabetes." (Emphasis added). The medical treatment cost savings for that "drop in cases" is projected at "almost $1 billion." In raw numbers, there are more modest decreases predicted in "strokes and heart attacks," and a significant decrease in deaths, 18,900. Saving twenty thousand lives is an admirable goal, one that regulators of opioids might focus upon, but that another issue. 

Despite these significant predictions, they remain predictions. Some criticize the conclusions as ignoring benefits other than medical expenditures, including "reduced absenteeism and greater productivity from a healthier work force." But a "senior dietitian at Ronald Reagan UCLA Medical Center" says that "this study has its limitations in part because the further out into the future you project, the more uncertain the results." She concluded that "only time will tell whether the models they use adequately predict what will happen."

There is empirical data supporting the contribution of "sugar-sweetened beverage consumption." The dietitian noted that "in cultures that do not drink sugary beverages, rates of overweight and obesity are almost nil." She also says data supports that "in developing countries, such as Mexico, India and China, where sugar-sweetened beverages have only been introduced in the last few decades ... rates of overweight and obesity quickly reached sky-high proportions."

But, according to the International Council of Beverages Associations the Mexican soda consumption was "reduced by only 11.6 milliliters (about two teaspoons) per person per day, according to the British Medical Journal study." The Council claims that the calorie reduction effected by the soda tax is "insignificant," and that it supports "no apparent health benefit." This must be compared, in the Council's perspective, to the loss of economic activity, purchasing of soda, that resulted from the tax. 

The World Health Organization (WHO) supports taxation as a tool. CNN reports that WHO has "urged governments to consider fiscal policies to limit the consumption of sugar-sweetened beverages and their associated health impacts." The organization asserts that "there is a growing acceptance of taxes as an important public health tool to help combat the rise of diabetes." 

According to The New York Times, the cost of the soda tax campaign in San Francisco and Oakland, California was about "$50 million - enough to buy every person in those two cities about 100 cans of" (hopefully sugar-free) soda. The Times reports that all three California soda tax initiatives (Oakland, San Francisco and Albany) are in the Bay Area. It notes that Berkley, California, Philadelphia, Pennsylvania, and others have passed such taxes, but that there have been about 40 failed efforts as well. 

Fox News reports that all four soda taxes on the 2016 ballots "passed . . . in landslide victories." One spokesperson was quoted saying "this is an astonishing repudiation of big soda." He stressed that "for too long, the big soda companies got away with putting profits over their customer's health." Imagine a company focusing on profit and the health of users getting the backseat?

The Three California taxes "will be one-cent-per ounce" and consumers in "Colorado will have to pay two-cents more for every ounce of sugary soda purchased." The taxes do not apply to diet soda. The calculation would therefore add $.12 to a twelve ounce can of sugar-sweetened soda in the Bay Area, and $.24 to the same can in Boulder. 

According to SFUnitedtoReduceDiabetes.com, the tax applies only to "any drink that is distributed in a container, whether a bottle, can, box or bag." It notes that the tax will not apply to "drinks brewed in a cafe, since that would be impossible to administer and would create a huge burden." So, that sweet tea or sugary latte will remain unaffected. But, according to Ballotpedia, the tax does apply to "syrups and powders that can be made into sugar-sweetened beverages, for example, fountain drinks from beverage-dispensing machines." 

I remain with questions. 

Will it be illegal for San Francisco, Oakland, etc. restaurants and stores to individually import (bootleg) such syrups, powders and bottled drinks from communities that do not impose such taxes? 

For people with in-home soda dispensers, will they order supplies from the Internet now, instead of buying local?

Will the consumption of sugar-sweetened soda decrease in these communities? 

Will the alternative beverages selected be healthier? Or will patrons divert to sweet tea and sugary lattes? 

How will the communities address unsweetened beverages in packets to which sugar is added? Will there be a tax on bags of sugar? 

Will there be an impact on the rates of diabetes and other maladies in these communities? Or will people turn elsewhere for their sugar cravings? (I know people who lunch on diet soda and candy bars). 

What food will taxation focus upon next in those communities or elsewhere? How about cookies, pastries, chips and more that include either sugar or fat?

Update: In December 2016, FoxNews reported that the UK would institute a soda tax intended to reduce obesity. Regulators there hoped drink manufacturers would respond by lowering sugar instead of raising prices on high-sugar drinks.