Yesterday, the Washington, D.C. city council rejected the passing of a "soda tax," but instead approved a 6 percent sales tax on soft drinks sold within the district. The difference?
The beverage industry mounted an all-out assault on the penny-per-ounce excise tax, with radio and newspaper ads plus automated telephone calls to city voters, because it would have raised the shelf price that consumers see when they purchase soft drinks. (The excise tax had a cap of 30 cents per container.) The sales tax of 6 percent, by contrast, appears only on the sales receipt after beverages have been purchased.Although it is admirable that some progress is being made with regard to improving consumer habits, particularly in schools (the council also approved a "Healthy Schools" initiative yesterday), a traditional sales tax will probably be less effective in deterring people than an all-out "soda tax." But if people are paying more either way, why conceal the fact? Raising the shelf price of soft drinks through an excise tax would make a stronger statement and potentially get more people to think twice before making their purchases.
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Photo (cc) via Flickr user poolie