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Michael Medved

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Seattle’s soda tax scam already a huge failure

(AP Photo/Rich Pedroncelli, File)

It only took three months to reveal Seattle’s soda tax as a monumental failure.

The tax, the city claimed, was never about collecting money. It was about curbing sugary beverage consumption to help prevent obesity and diabetes. Noble goals indeed. But the city is failing.

According to KOMO’s Matt Markovich:

In the first three months, the tax raised $4,446,000, nearly a million dollars more than was predicted. The city’s budget office estimated the tax would raise $14.8 million in its first year.

The city says 1.984 million gallons of sweetened beverage were taxed.

You see, if you raise nearly a million dollars more than anticipated, it means you haven’t curbed the demand at all. I suppose it could be typical, abject incompetence from the city’s forecasters. Because officials never admit they don’t quite know what they’re doing, we’ll have to judge this against their stated goals to curb consumption. It hasn’t worked,-unless you count bleeding low-income folks of money as a win.

And, as I’ve previously stated, it’s not meant to work. It’s purely meant to raise money for a bevy of city programs. They’ve intentionally set this tax up to fail one way or another.

If it fails to curb sugary beverage intake, the city benefits from the taxes collected. If it succeeds in getting you to ditch sugary beverages, you now have a bunch of programs people rely on, without a source of funding. So they’ve created a lose-lose scenario.

But it’s worse. Businesses are suffering, as are the low-income Seattleites who, demographically speaking, are more likely to consume the taxed beverages.

Business impact

There’s no doubt that the soda tax adds to the already growing cost of doing business in Seattle. And it particularly hurts businesses already suffering from razor-thin profit margins.

“It’s terrible, over and above my bill was $1,000,” Debra Wise, owner of Pecos Pit, told KOMO. “I can’t absorb that so I said OK, I have to pass it on.”

These claims shouldn’t come as a shock. In Chicago, their soda tax was seen as crippling to businesses. Indeed, it ended up being repealed. In the Chicago Tribune, it was noted:

No successful voter referendum has included a tax on diet pop. That’s because taxing sugar-free drinks contradicts the premise that a soda tax is a health initiative. Voters aren’t stupid. And they’re not ATMs.

Soon, Washington voters will get to decide whether or not cities can tax sugary beverages, with an initiative expected to make the November ballot.

Who drinks this stuff?

What’s particularly cruel about this tax is that it hurts the people it’s supposed to help. The bulk of the funds is supposed to go to family child care programs and college tuition assistance for Seattle high school graduates.

But low-income communities are more likely to purchase sugary sodas. According to Gallup, “nonwhites, and the low-income in the U.S. drink more regular soda than other Americans.” Making it worse, half of 18 to 29 year olds drink regular soda – the age group that is generally impacted the most when it comes to the rising cost of living in Seattle; so this tax makes life even harder for them. Further, “nonwhites (46%) and low-income Americans (45%) — two groups among the most likely to be obese — follow just behind the young in regular soda consumption.”

Further, according to a review of a recent CDC report by The Verge, “the people who are most likely to consume sugary drinks are younger adults, men, black people, and people with lower levels of education.

So who is this supposed to help exactly? Whatever the answer, given how much more money it’s raising that expected, no one is being helped yet. It’s a giant fail.

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