Starting January 1st, 2017 there will be a 1.5 cent-an-ounce tax on sugar sweetened beverages. The Philadelphia City Council and mayor, Jim Kenner, hopes the tax will raise revenues for improving public spaces, as well as prompt residents to make healthier choices. This tax is a big deal for the city as it will affect thousands of products. Even diet sodas, energy drinks, and sports drinks such as Gatorade will be affected. It could rise the price of a 2-liter beverage by $1 and $2.16 for a 12-pack beverage. Baby formula and beverages containing more than 50% of fresh fruit, vegetables, or milk are exempt from the tax. Beverages where the buyer requests or adds their own sweetener are also exempt. Undoubtably not everyone is a fan of this big change. The American Beverage Association has spent $5 million on advertisements just to stop this tax from being passed. Residents of Philadelphia and store owners alike feel that the tax is hypocritical and will disproportionately affect low-income families the most. Nonetheless a 13-4 vote passed the tax in June of this year and we will be seeing the effects as early as next year.
Benefits to the cityThe tax is expected to generate $91 million in the first year alone. Kenner states the proceeds will go to improving public parks, public schools, pre-kindergarten programs, recreation areas, and libraries. Health advocates also predict the tax will help decrease diabetes, heart disease, and obesity rates. The American Heart Association believes this tax "could reduce adult consumption of sugary drinks by 15 percent, obesity by 1.5 percent and new cases of diabetes by 2.6 percent,".
Will the tax even work?
Some critics feel the tax will ineffectively combat obesity as some residents may indulge on other foods high in fat and calories, or they may budget to omit some healthy foods to compensate for the soda tax. And others may ignore the tax completely and continue to buy sugar sweetened beverages as normal. However, there is abundant data that shows the tax is most likely going to be effective. Berkeley, California is the only other city in the US that currently implements the “soda tax”, and University of California, Berkeley researchers conducted a study to measure those effects. The tax passed in March 2015 and as of September 2016 sugary beverage consumption has decreased by 21%. Berkeley residents were studied and reported a 63% rise in the consumption of bottled or tap water. Compared to Berkeley, poverty and unhealthy eating/drinking habits are more prevalent in Philadelphia, so the effect of this soda tax is going to be more extreme. Placing taxes on sugary drinks will prompt residents to choice healthier drink options such as water. This is similar to how tobacco taxes drastically reduced smoking rates.