Pouring Cold Water on San Francisco's Proposed Soda Tax

Last month the San Francisco city council board of supervisors introduced a proposal to tax soda at a rate of two cents per ounce. The tax, which would have to be approved by voters, would add a whopping $1.44 to the cost of a six-pack of soda. The council supervisors liked the idea so much that they soon introduced a competing proposal to tax soda at exactly the same rate.

While San Francisco's dual, dueling taxes might be unique—and appear likely to be merged into one proposed tax before reaching voters—the city is hardly alone in considering soda taxes. Still, despite much noise about soda taxes, it's noteworthy that the city would become the first in the nation to enact such a tax.

Why haven't any soda taxes caught on? Among voters, at least, they appear to be about as popular as New Coke. Residents in two California cities last year considered and rejected proposed soda taxes by wide margins. And just this month, Telluride, Colo. voters rejected a soda tax by a similarly wide margin.

Despite voter opposition, cities and even national governments see taxes on foods like soda as a double whammy—a popular move that fills government coffers while cutting obesity. But the truth behind these shortsighted efforts is that they are often unpopular, aren't great tools for raising revenue, and don't cut obesity.

Indeed, data on soda taxes shows they simply don't work.

As I noted in a column last year, Denmark's so-called "fat tax" on foods containing greater than 2.3% saturated fat was such a debacle that the country's left-leaning government not only repealed the law, installed by its conservative predecessors, they decided to scrap the idea of a soda tax as well.

What was wrong with the law? The tax didn't help Danes lose weight. And Danish consumers outsmarted the tax by buying food in neighboring countries like Germany, where food prices are about one-third lower than in Denmark. One thing the tax did help Denmark lose is jobs (at least 1,000, by some reports), mostly those in the small-business sector.

Research also shows soda taxes don't work. For example, a 2010 study published in the Archives of Internal Medicine suggested that even an enormous soda tax of 40 percent would not make people healthier.

The study concluded that even that steep tax would be ineffective at reducing obesity among either high- or low-income earners, reported the Wall St. Journal. Its impact would be felt "only… in middle-income households," and only then to the tune of one pound per year.

"[A]s a weapon against obesity, such a tax isn't necessarily that effective, the study found," reported the Journal. I'll say.

Subsequent studies have bolstered the results  of the 2010 study, while others have suggested dramatically different results.

Soda taxes do have supporters outside of the San Francisco city council board of supervisors.

For example, Jill Filipovic, a Brooklyn-based columnist at The Guardian, cheers soda taxes and blasts what she calls the "pseudo-libertarian claim of 'the right to drink as much soda as you please[.]'" (What makes the claim "pseudo-libertarian" as opposed to actually libertarian is anyone's guess, as Filipovic doesn't elaborate.)

If San Francisco voters do approve a soda tax, they'd likely find the city suffering from the same lack of merriment as did poor Yorick's progeny.

"It's the 'the small business, entrepreneurs, the taco trucks' that will pay," I told the San Francisco Chronicle's Debra J. Saunders earlier this month.

Let's hope that San Francisco voters have the same sense on this issue as those in Colorado, Denmark, and other California cities.