Seattle’s Soda-Tax Bonanza

As the money pours in, the calories keep adding up
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SEATTLE — If Seattle's 18-month-old soda tax had been intended solely to raise money for the city, it would be a tremendous success. But as a mechanism to encourage consumers to drink fewer sugary beverages, it appears to be failing, according to a recent report in The Seattle Times.

In the first year of the tax collected since Jan. 1, 2018, the program brought in 49% more money than expected, $22.4 million vs. an estimated $15 million, the report states, making it the city’s fastest-growing revenue source.

Part of the miscalculation was that there was no way to know just how many soft drinks, energy drinks, juices, teas and other sweetened beverages were being consumed in the city.

“Until we started to tax soda, sweetened beverages, we had no idea what level of consumption occurred in the city,” city budget director Ben Noble told the City Council recently, according to the newspaper. “We know the level of consumption now. … With a year’s worth of experience, we think we’ve got this just about right.”

But while the coffers are full, the more high-minded goal of the tax—1.75 cents per ounce—appears to have missed the mark.

“The main point of even having a sugary-beverages tax is to blunt consumption of sugary beverages,” the newspaper said. “That doesn’t appear to be happening, to put it mildly. … It looks like soda consumption is going only up.”

The city budget office said revenues will be 8% higher this year than last to about $24 million and will continue to go up in 2020.

As just one example of the soda tax as a social experiment—there are others, including results in Berkeley, Calif., and Philadelphia—Seattle’s experience thus far suggests a sin tax on sugary drinks is not the way to reduce soda consumption and save consumers from obesity.

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