The Truth About Beverage Taxes

Baltimore is facing myriad issues – with the rising cost of living and scarcity of affordable housing high on the list.

WE NEED CREATIVE SOLUTIONS TO THESE COMPLEX PROBLEMS – NOT A BEVERAGE TAX THAT WILL ADD TO THE BURDEN PLACED ON OUR COMMUNITY.

Proponents of a “soda tax” or “sugary beverage tax” say they reduce sugar in the diet and decrease obesity rates, but the facts prove otherwise. In fact, numerous studies show that a tax on sodas and other sugar-sweetened beverages have not reduced beverage calories in a significant way. What they do is raise prices dramatically on everyday beverages, hurting working families, small and local businesses and their employees.

Beverage taxes don’t have the positive health impact on communities that some Baltimore CIty Council Members seem to think they do. The price increases from a tax will hurt lower-income communities and people who work paycheck to paycheck the most.

NUMEROUS STUDIES HAVE MADE IT CLEAR – BEVERAGE TAXES DON’T WORK WHEN IT COMES TO DRIVING DOWN OBESITY RATES AND CONSUMPTION.

Researchers for the CDC say that consumption of sugar-sweetened beverages among youth and adults in the United States has decreased significantly over a 15-year period. But at the same time the prevalence of obesity has increased” says the CDC National Center for Health Statistics. If beverages were driving obesity rates, those rates should have gone down with the drop in soda consumption.

A study by Drexel University found that the Philadelphia beverage tax had minimal to no influence on what Philadelphians are drinking, saying, “there was no major overall impact of the tax on general population-level consumption of sugar-sweetened or diet beverages, or bottled water.”

A 2019 study by researchers at Northwestern, UCLA and Washington University St. Louis on the beverage tax in Philadelphia found that the tax was limited in its ability to improve calorie and sugar intake, and affected low-income shoppers more severely.

Where beverage taxes have been imposed, communities have seen layoffs, cutting of work hours for employees, and higher prices on consumers. An Oxford Economics study found the tax in Philadelphia caused 1,200 people to lose their jobs and GDP decreased by $80 million.

Several ShopRites and Fresh Grocers in Philadelphia had to reduce hours of their unionized workforce due to a steep drop-off in sales caused by the beverage tax, equivalent to more than 200 full-time employees.

According to Catalina, a national market research firm, sales of soda went down a devastating 55% in the first year of the 1.5 cent per ounce tax. Yet, soda sales just outside the city went up by 38%, verifying that much of the reduction in sales in Philadelphia was due to cross-border shopping, said Catalina.

When a beverage tax was put in place in Philadelphia, researchers found poorer Philadelphians were hit hardest because they were not as likely to have the means to travel easily outside the city to avoid the beverage tax.

“We do not find substantial reductions in reported consumption for low-income groups nor for those living farther from the city border.”

– A 2018 study by researchers for the National Bureau of Economic Research.

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