This week, Philadelphia became only the second city in the United States (after Berkeley, CA) to approve a soda tax. The 1.5-cent-per-ounce tax on sugary and diet beverages was a significant win for the tax’s advocates, considering that the soda industry spent millions of dollars lobbying and advertising against it. Prior (failed) attempts to pass a soda tax in Philadelphia focused on the public health benefits; this time, Mayor Jim Kenney pitched the idea as a way to generate an estimated $90 million in new tax revenue to pay for prekindergarten, community schools, and recreation centers.
Opponents of the tax argue that it will disproportionately impact the poor, who are more likely to drink sodas. However, this argument disregards the underlying rationale for a soda tax: that the tax, by increasing the cost of unhealthy beverages, will lead to reduced consumption. So while the tax might initially impact the poor more than the rich, over time, it is argued, the poor will purchase less soda, thereby redistributing the burden of the tax and – importantly – generating significant health benefits.
This hypothesis is not untested. The soda tax is, in fact, derived from the tobacco tax, which has been proven to be one of the most effective measures for reducing tobacco consumption. A 10% increase in the cost of cigarettes leads to a 3-5% reduction in smoking rates. The tobacco tax is even more effective at reducing smoking among kids, minorities, lower-income populations, and pregnant women.
The success of the tobacco tax inspired public health advocates to consider where else the principle could be applied. Soda, which is a major contributor to our nation’s obesity epidemic, was an obvious choice. The US spends almost $200 billion each year treating obesity-related health problems, and studies have found significant links between consumption of sugary drinks and weight gain, particularly among children, along with increased risks of type 2 diabetes, heart disease, and gout.
Despite its potential to improve public health, proposed soda taxes proved to be much more controversial than tobacco taxes; they have failed to pass in more than 30 cities and states in recent years. One of the foremost problems with the tax is that people balk at being “told” what they should drink. Philadelphia sidestepped this issue by framing the tax as a source of revenue for community projects; the health benefits would just be an added bonus.
Philadelphia’s success may be a sign of greater acceptance of soda taxes; several other cities are considering similar measures this year. In the meantime, Philadelphia will become a case study to quantify the effect of a soda tax on public health.
Philadelphia’s soda tax goes into effect January 1. The soda industry is expected to sue to prevent its implementation.