Don’t pop that soda – it’s the igniter of the latest battle between presidential candidates Bernie Sanders and Hillary Clinton. And how can a soda pop hold such powers, you may wonder?
The Mayor of Philadelphia, Jim Kenney, recently introduced a plan to add three cents per ounce tax on soda, in order to fund universal pre-school. As The Daily Caller reported, Hillary Clinton announced her support on Wednesday:
“It starts early with working with families, working with kids, building up community resources — I’m very supportive of the mayor’s proposal to tax soda to get universal preschool for kids […] I mean, we need universal preschool. And if that’s a way to do it, that’s how we should do it.”
But it took only a day for her presidential rival Bernie Sanders to point out that the tax on soda will hit low-income Americans:
“Frankly, I am very surprised that Secretary Clinton would support this regressive tax after pledging not to raise taxes on anyone making less than $250,000, […] This proposal clearly violates her pledge. A tax on soda and juice drinks would disproportionately increase taxes on low-income families in Philadelphia.”
This, in turn, led Mayor Kenney to enter the battle the very next day, accusing Sanders of protecting the interests of giant corporations:
“I’m disappointed Sen. Sanders would ignore the interests of thousands of low-income — predominately minority children — and side with greedy beverage corporations who have spent millions in advertising for decades to target low-income minority communities.”
But according to UK’s Institute of Economic Affairs (IEA), Sanders is right about the low-income people being mostly affected by a soda tax.
And furthermore, some similar incentives in the past has not played out very well. Sugar taxes don’t work because the demand for sugar-filled drinks and fatty foods are of such kind that people continue to buy these type of foods and drinks despite the higher price. The response to higher taxes will often be just a switch to cheaper brands or cheaper shops, which may lead to the consumption of inferior products rather than less sugar.
A so-called “fat tax” was introduced in Denmark October 2011, which proved so ineffective that it was repealed in January 2013. People just switched to cheaper brands or bought products from across the border instead.
But a similar incentive in Mexico actually did cut the soda consumption among low-income soda consumers. A study showed a 17 percent decline, suggesting the higher prices did in fact make a difference. Still, IEA’s research labels the Mexican incentive a failure:
“Early evidence from Mexico suggests that a ten percent tax on sugary drinks led to an average daily decline in consumption of 36ml per person […] this is the equivalent of 16 calories and is ‘a drop in the caloric ocean. Long-term reductions in total energy in the range of 300-500 kcal/d are probably needed to prevent obesity.’”
So where does this leave Kenney, Clinton and Sanders? According to Politifact, the only other instance of a soda tax in the U.S. did show that somewhere between 25 and 70 percent of the cost of the tax is passed on to consumers. Therefore it would affect low income residents to a greater extent, just like Sanders predicts.
Education would be the tool for all consumers of how, and why, to regulate one’s intake of sugar. So no, don’t pop that soda.
