Berkeley Soda Study – Sugar Taxes Are Definitely, Definitively, Regressive

Much is being made of this new study about Berkeley’s soda tax. That it has all been terribly successful, that lots of people are drinking very much less sugary pop and that this is all a great thing. No doubt we’ll have health experts along in a moment to tell us all about that. From our point of view here this does have an item of interest – such sugar taxes are definitely, definitively, regressive. They really do weigh more heavily upon the poor. And, well, if that’s what you want to do, tax the poor, then sugar taxes are a good way of doing that.

Ourselves, around here, we’re unsure about that. Not entirely convinced that taxing poorer people – in the US that generally means darker people – in order to provide nice jobs telling people not to drink soda is quite the way to do it. Especially as the sort of people who get those nice jobs are going to be the middle and upper middle class types who are already better off than those being taxed. And, as the way these things work in the US, are whiter an pinker than those paying the taxes. We really don’t see taxing the darker working poor to provide jobs for the whiter middle classes as being an advance in racial justice.

Good thing we’re not in politics really:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Consumption of sugary drinks dropped 52 percent among Berkeley’s low-income residents in the three years after the city enacted a penny-per-ounce excise tax on sugar-sweetened beverages in early 2015, a new study shows. The study, which is the first to document the long-term impacts of a soda tax in the United States, suggests that taxation may be an effective tool in the fight against diabetes, heart disease and obesity.[/perfectpullquote]

That it’s regressive is shown by this:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]The bulk of Berkeley’s soda tax revenue is dedicated to supporting nutrition education and gardening programs in schools and to local organizations working to encourage healthier behaviors in the community.[/perfectpullquote]

Quite. The tax bears more heavily upon the poorer. The revenue goes to employ those middle class types. Not an advance in economic justice we feel.

But then it always was an odd contention that such taxation wasn’t regressive:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]The experts analysed the effects of taxes on sugary drinks, tobacco and alcohol in countries that have introduced them and found that the criticism that they are regressive – penalising the poorest – is unfounded.[/perfectpullquote]

As explained elsewhere:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] That’s really quite a remarkable claim, and the result of getting the definition of regressive wrong. They go on to tell us that it is those poor who change their behaviour most when subject to such taxation – telling us that the burden falls more heavily upon those poor, the definition of regressive here. What they’ve done is look at who ends up paying the revenue which sin taxes produce. Sure enough, people rich enough to buy lots of naughty things pay more of the tax. This is then used as their argument that, since the richer are paying more of the tax burden, this isn’t a regressive tax, it’s a progressive one. But that’s not how these words, concepts, are defined. [/perfectpullquote] [perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] Think on it. We tax Bill Gates at 1 per cent of his income, we tax some random welfare receiving family at 2 per cent of theirs. The vast majority of our revenue comes from the Microsoft founder but we’d not call it a progressive tax, would we? Because it isn’t, our definition depends upon the portion of income which vanishes in said taxation. The poor are paying 2 per cent of income, the rich 1 per cent, that’s a regressive tax. Sin taxes are a higher portion of low incomes than they are of high incomes, that makes them regressive taxes. There’s nothing more to it. It is, of course, exactly because such sin taxes bear more heavily upon the incomes of the poor that the poor’s reaction to them is greater. That very proof they use, that the effects upon health are progressive is exactly what shows us they are wrong: because it bears more heavily upon the decisions and actions of the poor. [/perfectpullquote]

The Berkeley claim is that the poor are drinking much less soda as a result of the tax. OK, accept that – that’s proof that the tax is a regressive one because it’s having this great impact upon the poor. QED.