California Lawmakers Propose a Dramatic Soda Tax

One in three Americans could be diabetic by 2050.

Photo via (cc) Flickr user USC News Service

Back in October, GOOD reported on the sales decline for full-calorie soda—a 25 percent drop over the past 20 years. Although people are changing their drinking habits for the better, diabetes is still on the rise. According to a report in The Washington Post, “Diabetes has reached epidemic proportions in the U.S., due to sugary diets and the lack of exercise. If current disease rates continue, one in three Americans will have diabetes by 2050.” This health epidemic has moved California lawmakers to propose a dramatic 2-cent-per-ounce tax on sugar-sweetened sodas.

California’s law would be the second major tax imposed on the sweetened beverage industry in the United States. In November 2014, Berkeley, California, voters approved a 1-cent-per-ounce tax on sodas and sugary drinks, and the early results have been good for city coffers. Berkeley raised more than $690,000 during the program’s first six months, putting it on a path to eclipse the $1.2 million per year predicted by the city. The money is allocated for health education programs, including the Berkeley Unified School District’s Cooking and Gardening Program. Although the city is happy with the proceeds, a study from Cornell University and the University of Iowa found that the price of soda in Berkeley rose by only half the amount of the tax. If the price increase isn’t felt by consumers, the tax is less effective at encouraging people to choose healthier options.

The California plan proposed by lawmakers yesterday would be more dramatic than Berkeley’s. It would propose a “health impact fee” of 2 cents per ounce, to be charged at the distributor level. The tax is supposed to create a $2 billion windfall for the state that would go to its diabetes prevention clinics and programs. The tax would raise the price of soda by 24 cents per 12-ounce container, which would do more to discourage soda consumption than Berkeley’s plan. On a deeper level, one hopes that if the new legislation is passed it won’t just punish soda drinkers, but encourage people to develop healthier eating and drinking habits in general.

(H/T Los Angeles Times)

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