Soda tax myths: Is A New Tax “The Last Thing” Berkeley Needs?

by on June 30, 2014

On July 1, the Berkeley (CA) City Council is expected to vote unanimously to put a proposal to tax sugar sweetened beverages on the November ballot. The proposed ordinance would impose a 1 cent per ounce tax to be paid by the distributors of drinks containing added sugar; syrups and similar added caloric sweeteners would also taxed. Milk-based drinks, natural fruit and vegetable juices, all of which contain naturally occurring sugar, would be exempt, along with baby formula, medically necessary drinks, and alcohol.

As the ordinance eloquently states, its purpose is “to diminish the human and economic costs of diseases associated with the consumption of sugary drinks by discouraging their distribution and consumption in Berkeley.”

Supporters of the measure expect it will reduce diabetes, childhood obesity, dental decay, and associated healthcare costs related to sugary drinks.

Not surprisingly, Roger Salazar, of the industry-funded astroturf group Californians for Food & Beverage Choice, sees it differently. A recent article in the East Bay Express explained:

“Salazar said his organization plans to emphasize that ‘a new tax is the last thing local businesses and families need.’ He also sounded an anti-big-government note: ‘When it comes to food and beverage choices, families don’t need government input. It’s up to consumers to make responsible choices for themselves and their families.'”

Fresh off successful efforts to defeat a statewide bill to put a warning label on sugary beverages sold in California, and to put a portion cap on sugary drinks sold in NYC, Big Soda is expected to come out swinging against both the Berkeley proposal and also a 2 cents per ounce tax proposal to be finalized shortly for the San Francisco ballot.

Like the tax proposed for San Francisco, which is expected to come before the SF Board of Supervisors for a final vote on July 22, the Berkeley tax is an excise tax.

How is that different from a sales tax? Sales tax is paid by the consumer, collected by the vendor (perhaps a corner market), and then forwarded to the government, without raising the vendor’s cost. An excise tax, on the other hand, is paid by the producer or distributor of a product, who may then pass along the added expense to vendors (like corner markets), increasing the vendor’s cost and ultimately raising the shelf price the vendor charges for the item.

Excise taxes are thought to be more effective at discouraging consumption than sales taxes, because a sales tax is added at the last possible moment prior to purchase, just before the total purchase price is rung up on the register. Even a shopper who is paying attention to the cash register (and not their cell phone), and sees a sales tax added on, is hardly likely, with people waiting impatiently in line behind them, to say, “Wait! Five cents extra for tax? I changed my mind – take the soda out of my bag and I’ll go pick out something less costly!”

The decision to choose a less expensive drink needs to be made earlier, in the soft drink aisle, when the shopper is selecting a beverage; that means in order to influence the consumer’s decision, the tax needs be included as part of the shelf price.

That’s what an excise tax does – because it is levied on the distributor – so at the time the customer is choosing a drink to purchase, the vendor has already adjusted the shelf prices upwards to cover the higher price they were charged by the distributor.

Despite industry claims that sugary beverage consumption is going down, and that therefore soft drinks are not responsible for the increasing number of people getting diabetes, the truth is that in California, teenagers are drinking more sugary drinks than ever before. African American, Latino and Asian teens have the highest rates of soft drink consumption, and sugary drinks remain the single largest source of added sugar calories in the diets of California children.

An excise tax for sugary drinks is a sensible strategy for reducing kids’ intake. As a recent article on teens’ sugar consumption in the digital news magazine TakePart explained, “Researchers learned from the institution of tobacco taxes that adolescents are disproportionately more likely to reduce their consumption of the taxed product, because they typically have less discretionary money to spend.”

As Big Soda continues to spend billions marketing their beverages to kids via everything from TV to social media, minority youth see far more of these ads than their white counterparts, and minorities suffer higher rates of diabetes than whites, making the battle against Big Soda a social justice issue.

As the Bay Area soda tax battle heats up, the beverage industry can be expected to trot out the myths they have used in the past to defeat such measures in other communities. Here, some of Berkeley’s leading soda tax supporters counter those myths with truth.

Myth: “There is no guarantee that even a penny of the money raised by such a tax would ever be spent on public health; politicians will just use it to fund their pet projects, or to line their own pockets.”

Truth: “Berkeley has long been at the vanguard of public health for our kids and families,” says Marian Mabel, a 20-year Berkeley resident, parent of two children in the Berkeley public schools, and co-PTA president at Malcolm X Elementary School. “We were the first to completely revamp our school lunch program – from fast and junky to fresh, healthy, and delicious food. We use our classrooms, gardens, and kitchens to teach kids and parents that their food choices matter, so whole families can take charge of their health. Berkeley and its leaders won’t reverse course now, especially when so much is at stake. Anyone who thinks differently is not from Berkeley.”

Myth: “The last thing Berkeley’s citizens need is Big Government telling them what to put in their shopping carts.”

Truth: “Let’s be real about who is telling people what to drink,” replies Martin Bourque, Executive Director of the Ecology Center, a 43-year-old Berkeley nonprofit focused on environmental impacts on urban residents. “The beverage industry is currently spending billions of dollars to get kids and people of color hooked on their product. This measure leaves everyone completely free to choose their beverages of choice.”

Dr. Xavier Morales,PhD, MRP, Executive Director of the Latino Coalition for a Healthy California, and a Berkeley parent, adds, “Big Soda really needs to stop telling my children what to drink. It has been repeatedly shown that the beverage industry targets youth in general, and youth of color in particular, in their marketing. Research also shows that Spanish speaking youth are exposed to more industry advertising than their English speaking counterparts.”

Myth: “Education, not new taxes, is the solution.”

Truth: “This measure is a vital next step in educating our community about the dangers of drinking sweetened beverages, and the disastrous impact those drinks are having on our youth and our communities of color,” explains Kad Smith, a Berkeley native and recent Berkeley High School and USF graduate working in the Ecology Center’s Education and Engagement program. “This measure has started a conversation around public and personal health, it provides an actionable way to reduce sugary drink consumption through a tax, and it creates a panel of child nutrition and public health officials who will work to find ways to fund programs to improve child health. I don’t think we can reduce it to ‘just a tax’.”

Myth: “It makes no sense to tax sugary drinks when people get most of their calories from other food.”

Truth: “Sugary drinks are not the same as a hamburger or even a slice of cake,” counters Dr. Lynn Silver, MD, MPH, Senior Advisor for Chronic Disease and Obesity at the Public Health Institute, Berkeley resident, and parent of a Berkeley High School student. “They have no real nutrients. Sugary drinks went from being a small sweet treat 50 years ago, to one that has an enormous industry aggressively pushing to maximize the ounces per day consumed by each one of us. When we look at why the diabetes epidemic erupted, sugary drink consumption was the biggest part of it. Our bodies simply can’t handle this load of pure liquid sugar, which turns into fatty livers, increased diabetes, heart disease and other illnesses.”

Latino Coalition for a Healthy California’s Dr. Xavier Morales points out, “For many of us, this is how diabetes starts. For Latinos, this is much deeper than a simple energy balance calculation. Multiple studies are now showing that many Latinos carry a variant of a gene that drives the liver to aggressively produce and store triglycerides which result in fatty liver syndrome, which is a precursor to diabetes.”

Myth: “This is just another regressive tax that will hurt low income people while doing nothing to address obesity.”

Truth: “Just like with tobacco, it is the soda industry’s marketing that is regressive,” charges Dr. Xavier Morales. “It is diabetes that is regressive. And with everything we are learning about the genetic predisposition of Latinos, we need to do everything we can to raise awareness about the insidious contributions sugary beverages have on the rates of chronic disease.”

“Don’t be fooled,” cautions the Ecology Center’s Martin Bourque. “The ‘regressive’ argument is straight out of Big Tobacco’s tired playbook. They are simply trying to trick unwary voters. Berkeley voters are too savvy to fall for this old industry trick. In reality, the only thing Big Soda cares about is their own sales earnings and stock values. They have been spending billions on predatory marketing specifically aimed at these same populations. Do you really think that Big Soda cares about the health of our most vulnerable populations?”

Myth: “It’s crazy to tax some sugary drinks, while others – like milkshakes, chocolate milk, and apple juice – are exempt.”

Truth: “High-calorie, low-nutrition sugary beverages need to be the target,” explains Professor Pat Crawford, DrPH, RD, Adjunct Professor in the School of Public Health at UC Berkeley, co-founder and director of the UC Berkeley Atkins Center for Weight and Health, and expert in the area of child nutrition and prevention of obesity and chronic disease risk factors. “Beverages with other redeeming nutrients need to be excluded. This includes milk-based beverages which are good sources of protein, vitamins and minerals, and it includes fruit and vegetable juices which are good sources of naturally occurring vitamins, minerals, and micronutrients.”

Sara Soka, campaign manager for Berkeley vs. Big Soda, sums up the soda tax battle this way: “Berkeley City Council knows that there is popular support among voters – backed by three recent citywide polls – for funding programs that improve children’s health. And the Berkeley Healthy Child Coalition, the citizens’ group leading the Berkeley vs. Big Soda campaign, is advocating for just that: reversing the health impacts of Big Soda’s marketing by funding programs that give kids and families tools to make good decisions about what they eat and drink. I’m confident that when Berkeley voters understand how the tax works, and that this is about kids’ health, they’ll support it.  We all want better lives for our kids.”

Read other articles in the Soda Tax Myths series:

Soda Tax Myths: Are Beverage Companies Friends to the Poor?

Soda Tax Myths: The Arkansas Argument
Soda Tax Myths: Soda Taxes Distract from Real Issues
Truth an Early Casualty in SF’s Soda Tax Fight
Soda Tax Myths: Are Beverages Being Unfairly Targeted?
Soda Tax Myths: Do Soda Taxes Reduce Obesity Rates?
Can Big Soda’s Statistics Be Trusted?
Soda Tax Myths: Does Big Soda Support Free Choice?
NY Soda Tax Advocate’s Advice for SF and Berkeley
Heartless Big Soda Terrifies Mom and Pop Businesses
Soda Tax Myths: Big Soda Says It’s Your Fault If You’re Fat
Soda Tax Myths: Do All Foods Really Fit in a Healthy Diet?
An RD Explains Why All Foods Don’t Fit in a Healthy Diet: Andy Bellatti

Soda tax myths: Will soda taxes really cost consumers more?


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Dana Woldow has been a school food advocate since 2002 and shares what she has learned at Follow her on Twitter @nestwife, or read more than 140 characters of her writing in her complete archive.


Dana Woldow

Dana Woldow advocates for policies, including soda taxes and better school meals, to improve the health of all children through better nutrition and education. She has been a leader in improving school food in San Francisco since 2002, when she formed a school nutrition group to run a pilot removing junk food from SFUSD's Aptos Middle School, where her children were students; the pilot was expanded to all of the city's public middle and high schools in 2003. She served as co-chair of the SFUSD Student Nutrition and Physical Activity Committee from October 2003 to June 2011.

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Filed under: Bay Area / California, Soda Tax/Food Politics

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