Pointing out flaws in the proposed Seattle soda tax

The proposed Seattle soda tax has sparked national attention and one commentator is calling foul on the effort.

“The purpose of this is somewhat convoluted, but it’s both to encourage people to drink less soda, and it’s supposed to pay for more educational programs, or health programs to encourage people to eat healthier,” Christian Britschgi told KIRO Radio’s Dori Monson. “There is a whole mix of progressive goals behind this soda tax.”

But that mix doesn’t add up, according to Britschgi.

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Britschgi writes for Reason.com’s “Hit and Run” blog and recently addressed the Seattle soda tax proposed by Mayor Ed Murray. He argues that the city’s touted purpose for the tax is not so much about education as it is a money grab.

“Two things that demonstrate that is, one, the inclusion of the diet drinks that magically increased the revenue from this tax from $16 million … to $23 million,” Britschgi said.

“Also, in the announcement press conference (for the tax), I believe it was Councilmember Tim Burgess who said in his opening remarks that ‘We work with the tax environment we are given,’ he said. “He’s stating in his remarks that this is about raising revenue given that the city is constrained, not necessarily the goals the mayor is adding onto it.”

The Seattle soda tax

The initial Seattle soda tax targeted sugary drinks but was later amended to include diet drinks. This is reportedly because drinks with more sugar tend to be consumed by lower class customers, and diet drinks are more often purchased by upper-class, white consumers. Adding the diet variety to the tax proposal increased the revenue.

Reason.com is a libertarian website that promotes free market ideals. A soda tax, therefore, goes against its leanings and its reporters are quick to point out that there are negative effects from the taxes, such as a similar one implemented in Philadelphia recently.

“There is a history of these kinds of taxes not working out,” he said. “You also see that with other soda taxes around the country. In Philadelphia, they implemented a pretty onerous soda tax, and you’ve seen revenue be disappointing from that, you’ve seen job losses, you’ve seen price hikes. These soda taxes are not free, they come at a cost. It seems like the mayor is not taking those into consideration with this proposal.”

“One of the largest distributors of beverages in Philadelphia announced shortly after that tax went into effect that they would be laying off 20 percent of their distributor staff,” he said. “There was also an article … where they spoke with an owner of a couple different shop rights that said this could end up costing some 300 jobs over the year … Those are significant. For a tax that has stated progressive aims, those are lower income jobs and provide jobs for lower income folks.”

The Seattle soda tax is working its way through the city council and has yet to be considered.