- The Seattle City Council approved a new tax on distributors of sugary beverages on Monday, according to The Seattle Times. The council agreed on a tax rate of 1.75 cents per ounce, translating to a tax of about $1.18 for a 2-liter bottle of soda.
- The tax will not affect diet soda, weight-loss drinks, 100% fruit juice, baby formula or medicine. It is set to go into effect in January 2018.
- "It's a huge win for Seattle," Victor Colman, director of the Seattle-based Childhood Obesity Prevention Coalition, told the paper. “It’s not a panacea for the problem of childhood obesity, but it’s a huge marker to take this step. Consumption drops will happen, and we’re going to see stronger health in the communities that need this the most."
Seattle is the latest city to enact a soda tax, reflecting a national movement away from high-calorie, sugary beverages that is quickly gaining momentum. Seattle's City Council approved the tax on a 7-1 vote following months of debate over the more nuanced aspects of the tax's regulations, some of which have yet to be decided. For example, the measure may impact syrups used in flavored coffee drinks that are prepared by baristas in coffee shops — including the Seattle-based Starbucks chain.
The tax will raise the cost of a 12-ounce can of soda by 21 cents, and an equivalent rate will be collected on syrups used to flavor fountain drinks sold by area restaurants and c-stores.
The American Beverage Association strongly opposed the soda tax, arguing the measure would hurt local entrepreneurs and result in job losses within the community. The claim isn't unfounded — following Philadelphia's 1.5 cent per ounce tax on sugary and diet drinks in January, PepsiCo announced it would need to lay off 80 to 100 area employees.
Still, other cities that have enacted taxes haven't had suffered job losses as a consequence. Berkeley imposed a one-cent-per-ounce tax in 2015, and there have been no reports of job losses in the San Fransico Bay Area's soda industry since.
Supporters of the Seattle tax argue the measure will reduce consumption of sugary beverages —which have been linked to unhealthy weight gain, obesity and diabetes by numerous studies — and help the city improve access to nutritious food for low-income communities. Councilman Tim Burgess, who sponsored the measure, told The Washington Post there's "incontrovertible evidence" that beverages such as soda negatively impact health, and that people of color are disproportionately targeted. "Liquid sugar has zero nutritional benefits," he told the Post.
The tax is expected to generate about $15 million in revenue each year. When Mayor Ed Murray proposed the tax in February, he suggested it could raise millions for programs that improve access to healthy food while helping ease education disparities between local white and minority students. A portion of the funds raised by the tax will also go toward job retaining and placement programs for workers negatively affected by the tax.
It will be interesting to see if additional cities fall in line with Seattle and cities such as Philadelphia, San Francisco Oakland and Chicago (part of Cook County, Ill.) The soda industry was handed a rare victory last month when voters in Santa Fe Soda easily rejected a tax increase on sweetened beverages. But soda taxes appear to be the way the tide is turning even though many feel that these measures unfairly target small businesses and low-income consumers. Others in the food and beverage space argue it's unfair to target a single industry for its unhealthy practices when many others also are to blame for unhealthy eating habits. At the same time, they question how successful these measures are in changing consumer consumption habits and improving community welfare.