THE COCA-COLA Co. used to claim things go better with Coke. On Thursday, the Philadelphia City Council decided that’s particularly true of taxes. The city’s new 1.5-cents-per-ounce surcharge on sodas and other sweetened drinks is a sensible step toward discouraging sugar consumption, if only a first step.
With the passage of its soda tax, Philadelphia will start charging citizens extra for buying waistline-widening beverages. Philadelphia’s policy may have won enactment because, unlike many failed proposals across the country, it channels revenue into a specific and popular cause: universal prekindergarten. Berkeley, Calif., which has a similar soda surcharge, also earmarks the money, in its case to community gardens and health programs.
Opponents of Philadelphia’s soda tax argued the price tag would hurt the poor more than the rich, because the poor drink more soda. But in Mexico, which adopted a soda tax in 2014, lower-income citizens have avoided the extra cost by cutting down on soda consumption at an even higher rate than the rest of the country, as the New York Times’ Margot Sanger-Katz has noted. In Philadelphia, city-funded preschool will help counteract the regressiveness of the tax by giving the poorest children in the city services many of them don’t benefit from today.
There are other concerns: As with tobacco taxes that go toward social programs, there’s something a bit perverse in funding an important project such as preschool with revenue that, if the policy works, will decrease over time. But, for the most part, sin taxes on tobacco have had the desired effect. And tying revenue to a popular project is often the only way to gain political acceptance of proposals many see as unwelcome coddling from a nanny state.
Philadelphia’s soda tax — or any tax levied only on sweetened drinks, for that matter — also doesn’t solve substitution problems. When soda becomes pricier, consumers might just opt for other sugary treats. Taxing sugar as an ingredient would be more effective. So would statewide surcharges or, better yet, a national tax. That way, Philadelphians couldn’t hop in the car and drive across the river to pick up a tax-free Coke in Camden, N.J.
It’s as important as ever that Americans reduce sugary products in their diets. Even one soda per day increases the risk of type-2 diabetes. One out of every 11 Americans is diabetic already, and more than 1 in 3 adults could develop the disease within the next five years. The latest numbers on obesity in America aren’t encouraging either: 35 percent of men and more than 40 percent of women are obese, and it’s still on the rise. Philadelphia’s policy opens the door to changes needed across the country.