It’s no secret that Hillary Clinton and Bernie Sanders have is advocating for a 3 cents per ounce (36 cents per can) taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. on sugar-sweetened beverages to help fund universal pre-K, a proposal which earned plauditA tax audit is when the Internal Revenue Service (IRS) conducts a formal investigation of financial information to verify an individual or corporation has accurately reported and paid their taxes. Selection can be at random, or due to unusual deductions or income reported on a tax return. s from Secretary Clinton, who said, “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.”
Senators Sanders strongly dissented. While emphasizing his support for universal pre-K, he blasted the funding mechanism: “I do not support paying for this proposal through a regressive taxA regressive tax is one where the average tax burden decreases with income. Low-income taxpayers pay a disproportionate share of the tax burden, while middle- and high-income taxpayers shoulder a relatively small tax burden. on soda that will significantly increase taxes on low-income and middle-income Americans. At a time of massive income and wealth inequality, it should be the people on top who see an increase in their taxes, not low-income and working people.”
Mayor Kenney, a Clinton supporter, then entered the fray with pointed remarks directed at the Vermont Senator: “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.” Framing the soda taxA soda tax is an excise tax on sugary drinks. Most soda taxes apply a flat rate per ounce of a sugar-sweetened beverage. as a “corporate tax – plain and simple,” Kenny continued in a statement, “It is immoral and completely hypocritical for these vested corporate interests to pass this tax on to the very people they have profited from for decades.”
It isn’t every day that Sanders is accused of siding with large corporations, so naturally, a response was forthcoming: “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.”
Those are some very caffeinated statements on an issue not typically associated with presidential politics. But who’s right?
Generally, taxes on sugar-sweetened beverages have been advanced as a public health measure, designed to increase the cost of soda compared to less sugary alternatives, and sometimes to fund public health measures with the resulting revenue. The jury is still out on whether soda taxes actually help combat obesity. At low levels, they may have a de minimus impact on consumption, and at higher levels (such as the proposed 36 cents per can rate in Philadelphia; at $4.32 on a 12-pack, it can actually exceed the cost of the soda itself), there’s a funding mechanism for expanding access to preschool. If the high taxes actually alter consumption patterns—or, quite plausibly, induce people to stock up on soda outside the city limits—the preschool funding will fail to materialize. And if significant revenue is generated, Sanders is correct about low- and middle-income individuals bearing a disproportionate share of the cost.
According to a Gallup survey, 45 percent of American adults earning less than $30,000 per year drink regular soda, compared to only 20 percent of adults with incomes of $75,000 a year or higher. Similarly, 46 percent of minorities consume regular soda, compared to 27 percent of white respondents. A 2013 National Institutes of Health study reached a similar conclusion.
As more cities and states consider soda taxes, this remains a central tension: if the taxes succeed in curbing soda consumption (whether or not they actually reduce caloric intake overall), they do so at the expense of the tax revenue they are designed to generate. And to the extent that soda consumption continues (as it surely will), that tax burden will be borne disproportionately by individuals of lower socioeconomic status.
It’s no surprise that soda taxes are a big issue in 2016—but now, the issue is positively presidential.Share