DC City Council Approves Hotly Contested ‘Soda Tax’

In a surprising move Wednesday, the Council of the District of Columbia gave preliminary approval to extend the city’s 6% sales tax to energy drinks,  sports drinks, and sweetened drinks including diet and non-diet sodas.   Water, fruit juices, milk, coffee, and tea are exempt from the tax.

The controversial move has already pitted grocery retailers, restaurateurs, and liquor stores (not to mention the impressive Big Soda Lobby) against those who feel strongly that the initiative, advanced in support of the Healthy Schools Act of 2010, will provide an estimated $6.5 M in funding to DC’s school health programs.  The money would be directly allocated to school gardens, healthy meals and physical fitness.  According to DC Councilmember Mary Cheh who proposed the tax, the point is to direct this revenue toward fighting the city’s obesity epidemic.

While this move may be upsetting to some locals, who have threatened to drive over to Maryland or Virginia to buy their soft drinks, DC is certainly not the first in the nation to have imposed such taxes on sugary or artificially-sweetened drinks to combat the obesity epidemic.  West Virginia, Virginia, Alabama, Rhode Island, Tennessee, and Arkansas have both a sales and excise tax on soda.

New York’s Governor David Paterson, and Philadelphia’s Mayor Michael Nutter are both taking serious looks at it amid widespread debate.  Scientific research has long supported that there is a direct correlation between reducing intake of sugary drinks, and weight loss.  Especially in cases where there is a large inner-city population to consider, the feeling is that the price hikes will disproportionally affect the poor.

Taking a quick gander at a typical neighborhood grocery circular and using 3rd grade math, your intrepid blogger noted that a 6% ‘soda tax’ means approximately

a $0.12 price increase to a 2-liter bottle of soda

a $0.18 hike on a 12-pack of Coke or a bottle of Gatorade

and a Red Bull from the corner store might cost $0.15 more

So, in truth, a regular grocery shopper would likely be able offset whatever financial suffering they might feel…with a coupon.