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Is the Soda Tax Effective?

Cropped SingleCare logo By | March 21, 2016

Philadelphia is the most recent city in the United States to introduce a proposed tax on sugary drinks, once again raising questions as to whether or not soda really deserves a sin tax — and whether the tax will curb consumption at all.

Philadelphia’s Mayor Jim Kenney is calling for a 3-cents-per-ounce tax on sugary drinks to help fund citywide Pre-K and community schools, among other improvements, according to NewsWorks. The proposal comes nearly one year after the city of Berkeley, California implemented a soda tax.The public health benefits of the measures have yet to be intensely studied.

Philadelphia’s Soda Battles

Philadelphia skyline panorama at dusk. Schuylkill expressway traffic runs parallel to Schuylkill river.
MIHAI ANDRITOIU/Thinkstock

Mayor Kinney’s proposed tax is not the first Philadelphia has encountered. Kinney’s predecessor, Michael Nutter, twice tried to pass a city tax on sweetened beverages, only to fail both times to bring the proposals to a vote. Kinney’s plan has clearer, more detailed strategies in place, including using the revenue for improving parks, recreation centers, and libraries, in addition to public education programs.

The tax itself is 3-cents-per-ounce, roughly raising the cost of a 20-ounce soda by 60 cents. Proponents of the tax cite the potential public benefits it can bring about beyond raising money to fund Mayor Kinney’s plan — a curbed consumption of higher priced soda could bring about public health benefits, which is vital for the City of Brotherly Love where obesity is a major problem. Of 10 counties across the United States with the largest cities, Philadelphia has the second-highest rate of obesity, with 68% of adults and 48% of children between the ages of six and 17 being overweight or obese. In North Philly, the rate of obesity among children jumps to almost 70%.

Nationwide, the cost of Medicare and Medicaid for obesity-related issues is more than $60 billion a year, according to the Washington Post. Many believe that soda taxes are part of the solution, especially given that 12-19 year-olds across the United States consume more than 300 calories a day in the form of sugar from sweetened drinks, as the BMJ reports.

Soda Taxes & Efficacy

Boy Drinking Unhealthy Bottled Soda
Dunca Daniel/ThinkStock

But will a soda tax actually work? Unfortunately, the answer is not so clear, and looking at the few cities already utilizing soda taxes does little to clarify the matter. In January of 2014, Mexico implemented a nationwide tax of one-peso-per-liter on sugary drinks, a 10% price hike, according to Wired. On average, the purchases of soda and other sweetened beverages declined 6% in the first year, then 12% by December of 2014. Public health expert Kelly Brownwell of Duke University says that number is significant given the relatively small size of the tax.

Meanwhile in the UK, researchers from the Yale Rudd Center for Food and Obesity Policy concluded that a 20% tax on sweetened drinks would reduce the number of obese adults by 180,000 people, and those who are overweight by 285,000 people, with the greatest health benefits occurring in “young people.”

The effects of the aforementioned Berkeley, CA tax, however, are harder to measure in part because of its proximity to San Francisco and Oakland, which make it easy for consumers to purchase untaxed sugary drinks. This also gives credence to the idea that a statewide or nationwide tax is the most effective. As far as the data goes, it may be too soon to know anything for sure given the recency of these changes to legislation.

Moving Forward

Drinking a Can
Mario Guti/Thinkstock

Part of the controversy surrounding soda taxes is that despite a decline in consumption of sugary drinks since 2000, the rate of obesity has remained more or less the same according to the Journal of the American Medical Association. Moreover, the tax is likely regressive — affecting those in lower income brackets more than wealthier consumers.

No matter the politics behind the tax, health experts agree that reducing consumption of sugary drinks is a good thing, according to Medical Daily, in the same way affordable healthcare is. Yet, finding the right doctors at the right prices when you do have a health problem can be prohibitive. Members of SingleCare have access to a massive online database of practices and practitioners, making it easy to find the best fit while saving users an average of 48% on medical care.

(Main image credit: Siraphol/Thinkstock)