Seattle’s soda tax beneficial for lower-income communities, according to UW study

Jul 19, 2022, 5:15 PM
(Photo by Spencer Platt/Getty Images)...
(Photo by Spencer Platt/Getty Images)
(Photo by Spencer Platt/Getty Images)

A new study by the University of Washington (UW) found that sweetened beverage taxes, like soda, produce benefits for low-income families.

The study, “Sweetened beverage taxes: Economic benefits and costs according to household income,” authored by Jessica Jones-Smith, Melissa Knox, and other researchers, focused on three cities — Seattle, San Francisco, and Philadelphia.

“Because these taxes are designed to take the revenues and put them back into programs that help lower-income communities, the sort of net benefits are actually positive,” Knox said on Seattle’s Morning News on KIRO NewsRadio. “So even though lower-income households are paying into the tax, they’re receiving more than what they pay in terms of benefits back.”

Study: 97 percent of Seattle soda tax passed on to consumers

Knox is an associate economics professor at UW as well as co-authoring this study.

For Seattle’s lowest-income communities, the study found that the average tax paid per person was $19, or $2,785,854 for the total of the lowest-income population. However, those same communities received over $6 million in money invested in the programs implemented.

Seattle has had a sweetened beverage tax since 2018.

“One of the large programs funded by Seattle sweetened beverage tax is the Fresh Bucks Program and that’s actually a fruit and vegetable subsidy program. So households that are able to enroll in that program actually get $40, or sometimes more, to spend on fruits and vegetables at various grocery stores around the area and farmers markets,” Knox said. “So the hope, I think, with these programs is that by making them a lot easier and less expensive to purchase that that that will sort of encourage people to change their habits.”

In 2018, Seattle gathered more than $22 million in sweetened beverage tax revenue, $7 million more than initially projected. This money helped fund the 13th Year Promise Scholarships, job training programs, initiatives designed to help close the food security gap, and aid programs for at-risk children.

In all three cities studied, there were no statistically distinct differences in the amount paid per person toward these taxes by income level, according to Knox.

Listen to Seattle’s Morning News with Dave Ross and Colleen O’Brien weekday mornings from 5 – 9 a.m. on KIRO Newsradio, 97.3 FM. Subscribe to the podcast here.

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Seattle’s soda tax beneficial for lower-income communities, according to UW study