Seattle City Council Passes Soda Tax That Doesn’t Include Diet Drinks

Image courtesy of J-J-W

Taxes on sweetened beverages are a hot new trend among cities, sweeping progressive spots like Philadelphia, San Francisco, Oakland, the Chicago area, Boulder, and now Seattle. Like other cities, Seattle will charge the tax at the distributor level, but it will not include “diet” drinks with non-nutritive sweeteners.

The City Council voted 7 to 1 in favor of the measure, which exempts 100% fruit juice, weight-loss beverages, and baby formula. While barista-made espresso beverages with flavored syrups were originally exempted from the tax, they were explicitly included with an amendment.

The Seattle Times reports that now council members think that the tax doesn’t include coffee beverages, but it’s not clear.

“It’s not a panacea for the problem of childhood obesity, but it’s a huge marker to take this step,” the director of the Childhood Obesity Prevention Coalition told the Times. “Consumption drops will happen, and we’re going to see stronger health in the communities that need this the most.”

Is the purpose of these taxes to raise money for city programs, or to socially engineer people into choosing different beverages? In Philadelphia, the measure was sold as a way to raise money for universal pre-K, city parks, libraries, and tax credits for businesses that sell healthy beverages.

In Seattle, supporters used both arguments, with tax revenue slated to be used for healthy-eating programs in poor communities, which have disproportionate rates of obesity and related diseases. Tax money would also help support a city program that lets food stamp recipients get more fresh produce for their money at farmers markets.

The tax’s opponents argued that it would lead to job losses and cause problems for small businesses within the city limits. Beverage giants Coke and Pepsi, for example, have simply stopped selling 2-liter bottles in Philadelphia, saying that sales have fallen after the city imposed a $1 tax on bottles of that size.

In Seattle, the tax will be around $1.18 for a 2-liter bottle, and diet drinks are not included. That caused some controversy among council members, who noted that the people who drink diet beverages are generally wealthier and whiter, meaning that the tax burden would fall on poor people and people of color in Seattle.

Opponents could still kill the tax with a citywide referendum, taking the question of soda taxes directly to voters, taxpayers, and soda drinkers.

In other cities where sugary drink taxes have passed and been implemented, opponents are still trying to get rid of them them. In Philadelphia, state legislators kept fighting the tax even after it went into effect, claiming that it’s an “impermissible sales tax.”

Earlier this decade, New York City mayor Michael Bloomberg fought to implement his own ban on very large sweetened beverages. He went around the city council and voters by making the drink ban a Department of Health regulation, not a city law. An appeals court ruled that the size of drinks was not part of the health code, and a rule regulating drink sizes would need to be a law passed by the city council.

Since leaving office, Bloomberg has been donating millions of dollars of his own money to nonprofit groups that campaign for soda taxes.

In a statement, trade group the American Beverage Association condemned the new tax.

“The City Council targeted small business owners and low-income working families with a job-killing tax that will only worsen Seattle’s income inequality, and, despite what councilmembers are promising, it won’t improve public health.

When this tax went to a ballot in Santa Fe just last month it was overwhelmingly defeated by the people. Things are hard enough for people living paycheck to paycheck, and this tax will make it even harder.”