News

Soda Tax Canned

by Jonathan Zhanay, Staff Writer

On December 1, the sugary beverage tax was repealed after a fifteen-to-one vote by Cook County commissioners. With the loudest opposition coming from beverage industries and local stores owners, this is a major upheaval that showed the commissioners siding with local businesses and consumers. The prices of sodas and other sugary beverages will return to how it was before the tax.

Cook County Board members forced a beverage tax on nearly five million people on August 2, 2017. The tax came with an infuriating sticker shock for consumers: a drastic increase in the prices of many sugary beverages, including a two liter bottle of Coca-Cola, whose asking price was now $3.49 — a full dollar more than its original cost of $2.49 when the $0.67 beverage tax, $0.26 sales tax, and $0.07 Chicago soft drink tax are added.

The tax-induced price hike resulted in lower overall profits for local convenience stores, while the added expense of purchasing soda within Cook County has been so jarring that some shoppers have found themselves traveling outside county limits to obtain these products elsewhere.

On November 10, 2016, the tax was first introduced by lawmakers and the media as a “soda-tax,” implying that sodas would be the only taxed beverages. This term was later amended with a  clarification that the proposed tax would be intended for  “sugary beverages,” creating confusion amongst consumers regarding the validity of the tax and what products it would involve.  This self-interest resulted in conformity by those who didn’t seem affected; some people supported the tax because they were unaware that it would affect them as a result of its misleading language.

According to Can the Tax Coalition, 75% of Cook County retailers surveyed that the tax decreased beverage sales by 20%, a number that was reported to be 30% by the 40% of Cook County retailers surveyed, and 40% by the 15% of Cook County retailers surveyed, respectively.  Although these losses in beverage sales have been predicted by the Cook County Board of Commissioners to at least 25%, the returns from some beverage sellers contradict these statistics, showing far higher losses that have translated into layoffs at local businesses, while neighboring counties have enjoyed a 20% increase in overall sales owing to their newfound patronage by Cook County consumers, who will frequent neighboring counties to buy their beverages, and choose to buy the rest of their groceries there too.

At face value, a one cent per ounce tax may seem  insignificant, especially when compared to the higher countywide sales tax,  and the fact that the amount of Cook County soda drinkers has remained unchanged.

Caleb Schmidt ‘18 was an initial supporter of the “soda tax,” until he realized that it also extended to fruit juice, his preferred drink.  Caleb said, “I do believe that this tax might help lower sugar intake and improve health. I just buy fruit and make my own juice. It’ll be about the same price.”  

Victor Mei ‘18 disliked the tax because of the price he would have to pay for soda: “I really didn’t like the tax because I would need to pay more for a drink. So I decided to not go to stores that charge me the tax.”

Unveiled as an initiative enacted to improve the health of children and balance the budget, the tax didn’t reach its desired outcome, largely because those targeted simply stopped buying sugary beverages, or didn’t buy them in Cook County.   

Ambitions for the tax’s success were high, with Cook County Board President Toni Preckwinkle boasting it would raise upwards of $200 million in the first fiscal year, while the Cook County treasurer’s office predicted the tax’s revenue collection would amount to $9 million for the month of August 2017 alone, a colossal overestimate when the month’s revenue collection yielded $300 thousand, just 3% of their initial prediction.

The so-called “soda tax” didn’t aid in improving health by reducing sugar intake, either. It had only been implemented for a short time and had only targeted one part of the health problem: raising the price of sugary beverages, a product in abundance at corner stores within poor neighborhoods, without providing healthier alternatives to said neighborhoods, many of which are located in food deserts.

This tax was regressive, an easy way to gather revenue for the County’s budget and funding for programs. Cook County noticed the effects of this sugary beverage tax in other cities such as Philadelphia, where there is a 1.5 cent per ounce tax and saw that the tax failed to meet its projected total and showed an overall decrease in beverage sales.

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