In March, Berkeley, California, became the first city in the nation to institute a soda tax. The tally is in for the first month’s revenues, and the city took in $116,000 in taxes, according to NBC Bay Area.
Berkeley’s tax is one penny per ounce, which is charged to the retailer on sweetened drinks. The retailer can choose whether to pass the tax on to consumers or not.
The soda tax isn’t a soda-only tax. It’s a tax on sugar-sweetened beverages, whether they’re sodas, iced teas, lemonades, sports drinks or other drinks with added sugars. Diet sodas and other no-calorie beverages aren’t taxed.
When I’ve commented about soda taxes in the past, I’ve been skeptical about their ability to improve public health. Many proponents of soda taxes believe the increased price will get people to buy less soda and other sweetened beverages. If people consume fewer sugary drinks, the assumption is that it will lessen the incidents of health problems linked to sugar consumption like obesity and diabetes.
In the long run, I believe people will adjust to the higher prices of soda — if they notice the higher prices at all — and soda consumption will stay about the same. Or people will switch from sugar-sweetened drinks to artificially sweetened drinks. In the video above, one of the store clerks interviewed by reporters said, “More people are buying sugar-free products — the diet soda, the zero sodas, the energy drinks with no sugar added.”
If the goal of the soda tax is to improve health, a switch from sugary drinks to artificially sweetened drinks is probably not going to accomplish that goal. The science is beginning to show that diet drinks do not lead to increased health in the long run. The artificial sweeteners used in diet sodas are linked to increased belly fat, diabetes and even depression, which can cause some people to overeat.
But if the goal of the soda tax is to bring in revenue, then it’s working. If the first month’s revenue is any indicator, Berkeley is on its way to bringing in $1.2 million a year. Presumably, that money could be used for education programs to inform the public about proper nutrition or for food programs that provide fresh produce.
Where Berkeley’s soda tax revenue will end up has not yet been decided. According to Nosh, a Berkeley area website, a soda tax panel is now convening to decide where it will propose to the city council what the money should fund. The council will have the ultimate decision whether to accept the proposals or not.
Related on MNN:
- The SWEET Act: National sugar-sweetened beverage tax proposed
- 5 reasons to kick your diet soda habit
- What's the difference between club soda, seltzer water and tonic water?