What are the costs of enacting a “soda tax” for businesses and consumers?
Delaware Governor John Carney said a soda tax — a surcharge on sugary beverages — is on the table for the First State, after passing similar legislation regarding sugary drinks in kids’ meals. But many concerned citizens, including political advocacy groups like A Better Delaware, question if the bill will actually improve public health – or if it will simply hurt local businesses and low-income residents.
Does the soda tax work?
A study by Northwestern University highlighted the impact of a soda tax enacted in Philadelphia. While the soda tax did decrease the number of sugary beverages purchased, sales of sugary beverages increased in nearby cities without the soda tax, suggesting that people still bought sodas – just in places that had them at a lower price.
Currently, the majority of studies on the effects of a soda tax focus on the number of sugary drinks purchased – but whether or not that corresponds to a significant decrease in obesity and an improvement in public health remains to be seen.
In each city where the tax has been enacted, the tax has proven to improve government revenues, rather than health.
Why some are concerned
What happened in Philadelphia could happen in Delaware: Consumers might make the short trip across state lines to purchase cheaper products. Delaware is surrounded by other markets where consumers could take their business — and money.
Delaware Governor John Carney said a soda tax — a surcharge on sugary beverages — is on the table for the First State, after passing similar legislation regarding sugary drinks in kids’ meals. But many concerned citizens, including political advocacy groups like A Better Delaware, question if the bill will actually improve public health – or if it will simply hurt local businesses and low-income residents.
Does the soda tax work?
A study by Northwestern University highlighted the impact of a soda tax enacted in Philadelphia. While the soda tax did decrease the number of sugary beverages purchased, sales of sugary beverages increased in nearby cities without the soda tax, suggesting that people still bought sodas – just in places that had them at a lower price.
Currently, the majority of studies on the effects of a soda tax focus on the number of sugary drinks purchased – but whether or not that corresponds to a significant decrease in obesity and an improvement in public health remains to be seen.
In each city where the tax has been enacted, the tax has proven to improve government revenues, rather than health.
Why some are concerned
What happened in Philadelphia could happen in Delaware: Consumers might make the short trip across state lines to purchase cheaper products. Delaware is surrounded by other markets where consumers could take their business — and money.
Additionally, all seven U.S. cities that have enacted one have a tax structure that places the burden of the tax on the distributor, increasing the cost to companies like Coca-Cola and Pepsi to sell their product and passing off some of the burden in a cost increase to the consumer.
Chicago and Santa Fe have already repealed their soda taxes after opposition from constituents, business owners and companies distributing in these areas.
One proponent of a sugar tax asserted, “The problem is in people who don’t have a lot of money, and so higher taxes should have a bigger impact on their [low income] behavior and how they deal with themselves.” This position fails to acknowledge the impact on people’s ability to make ends meet, and disproportionately targets lower incomes.
A Better Delaware, a nonpartisan political advocacy organization, has been raising visibility of this issue and others that might inhibit the state’s economic growth. Particularly concerning is the unprecedented move of a statewide tax on sugary beverages, according to Zoe Callaway, executive director of A Better Delaware. “If this measure has been less than successful in the cities it has been tested in, our legislators should avoid testing it across our entire state — possibly at the detriment of Delaware families, communities and businesses,” Callaway writes on the organization’s blog.
What you can do
Currently, the Delaware Department of Health and Social Services is researching the implications soda tax in the First State. If and when a bill is introduced, voters should be aware. The best way to ensure that information reaches your mailbox is by registering to receive newsletters from A Better Delaware which can keep you apprised about this and other issues that matter. And For those who want to learn more about governmental transparency and pro-business policies, visit A Better Delaware or contact Executive Director Zoe Callaway.
The budget loophole Delawareans should know about
What should Delaware do with extra revenue?
More money won’t fix Delaware’s school systemAdditionally, all seven U.S. cities that have enacted one have a tax structure that places the burden of the tax on the distributor, increasing the cost to companies like Coca-Cola and Pepsi to sell their product and passing off some of the burden in a cost increase to the consumer.
Chicago and Santa Fe have already repealed their soda taxes after opposition from constituents, business owners and companies distributing in these areas.
One proponent of a sugar tax asserted, “The problem is in people who don’t have a lot of money, and so higher taxes should have a bigger impact on their [low income] behavior and how they deal with themselves.” This position fails to acknowledge the impact on people’s ability to make ends meet, and disproportionately targets lower incomes.
A Better Delaware, a nonpartisan political advocacy organization, has been raising visibility of this issue and others that might inhibit the state’s economic growth. Particularly concerning is the unprecedented move of a statewide tax on sugary beverages, according to Zoe Callaway, executive director of A Better Delaware. “If this measure has been less than successful in the cities it has been tested in, our legislators should avoid testing it across our entire state — possibly at the detriment of Delaware families, communities and businesses,” Callaway writes on the organization’s blog.
What you can do
Currently, the Delaware Department of Health and Social Services is researching the implications soda tax in the First State. If and when a bill is introduced, voters should be aware. The best way to ensure that information reaches your mailbox is by registering to receive newsletters from A Better Delaware which can keep you apprised about this and other issues that matter. And For those who want to learn more about governmental transparency and pro-business policies, visit A Better Delaware or contact Executive Director Zoe Callaway.