In unexpected news, Illinois’ Cook County, which includes Chicago, recently voted 15-2 to repeal the area’s penny-per-ounce tax on sweetened beverages.
The beverage tax narrowly passed in November of 2016 and will remain in effect until December 1, 2017. The tax has been contentious from the start, with opponents arguing that it burdens consumers and small businesses, and supporters contending that it buoys the budget and promotes healthier choices. Opposing the tax, the “Can the Tax Coalition” – funded by the American Beverage Association – said that “beverage taxes just don’t work.” At this point, it’s clear that these taxes do materially decrease soda consumption, although whether that effects public health or not still hasn’t been demonstrated. Mexico’s one peso per liter soda tax decreased purchases by 10% in 2015 – in the first two years, soda consumption decreased by 7.6%, and bottled water sales grew 7%. Berkeley’s tax was associated with a similar 10% decrease in sugar-sweetened beverage sales. Notably, the Cook County tax covered all sweetened beverages - not just those sweetened with sugar. This included drinks sweetened with artificial sweeteners, like diet sodas and flavored waters.
Many soda tax proponents have made strong statements about the public health benefits. For example, George Washington University's Mr. Michael Long recently presented a careful meta-analysis estimating that a national sugar drink tax would, in one year, cost only $47.6 million, potentially prevent 576,000 cases of obesity, and save about $31 healthcare dollars per dollar spent. However, the author himself conceded that a key limitation of the analysis is a lack of real-world data - so we view this work as indicative of the public health potential, rather than a sure thing. We are waiting impatiently for some credible data from the locales that have already imposed soda taxes.
One appealing aspect of taxing sweetened beverages to politicians is the significant tax revenues. So even if the taxes don’t directly diminish obesity, revenue could be used to subsidize bottled water, or invest in educational or family support programs, which could have health impacts at scale.
Curiously, it’s also not as if Cook County doesn’t need the money – it faces a $200 million budget deficit. Ultimately, this repeal underscores the contentious nature of the fight, the power of the beverage industry and the lack of broad public support.
Despite this, we would have liked to see Chicago embrace a soda tax – it’s only by conducting these experiments that we can learn what helps in the fight against diabetes, and they have the added benefit of publicizing the terrible size, scale and cost of the diabetes epidemic.