Yet another city has decided that taxing sugary beverages is a great way to generate revenue. The new Seattle soda tax is just the latest in a string of cities that have adopted the idea.
Starting January 1st, Seattle imposed a new tax on sugary beverages. The tax adds an additional 1.75 cents per ounce on beverages deemed “unhealthy” due to high sugar content.
The city expects to raise an additional $15 million per year off the tax which is generally disliked by the community.
A Tax or a Fee?
The official name for the measure is the “Sweetened Beverage Recovery Fee” which detractors argue is just a softer sounding name than “tax.” The cost is put on the seller which is passed on to the consumer so whatever the name, it’s hard to imagine it as being anything other than a tax.
“Sweetened beverage recovery fee” sounds almost noble. Seattle soda tax doesn’t have quite the same ring to it.
Other cities, such as Philadelphia, have decried their beverage taxes as being detrimental to local businesses. In Philadelphia as well as Seattle, chains such as Costco are actively pointing their customers to stores that are outside the taxable area.
In Philadelphia, 9 out of 10 local business owners reported a decrease in revenue. Of those 9, 60% blamed the cities soda tax. Seattle will likely face similar effects, although proponents don’t believe that will be the case.
“We did not see any data that really shored up the argument that this hurts local businesses,” said Lorena González, a Seattle City Council member.
Clearly they haven’t spoken with Philadelphia business owners.
High Tax Exodus
Some Seattle residents will be content to cross the city limits in search of less expensive Gatorade. However, the increase in taxes is indicative of a larger trend in American cities. Higher taxes are driving out residents in droves who are escaping the tax-ocalpyse in search of a lower cost of living.
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