Hood Health Care: The sweeter the soda, the sweeter the tax

Ian Graber-Stiehl, The Root | 7/5/2017, 10:44 a.m.
Black America, there are two health facts we should get straight. First, by demographics, we’re the most disproportionately dependent on ...
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Black America, there are two health facts we should get straight. First, by demographics, we’re the most disproportionately dependent on the Supplemental Nutritional Assistance Program (SNAP), or as it’s more commonly known, food stamps. Second, soda is not our friend. And that goes for the beverage, the companies that make it, and organizations like the American Beverage Association, which is currently backing a fight against a soda tax in Cook County, Ill.

You might’ve heard about the tax, as it was trending on Friday. The long and short of it is Illinois is broke. This isn’t news. Illinois has had bills due for years, about $15 billion’s worth. The state is also on the hook for $199 billion in public retirement benefits and is about $119 billion short. In fact, it may become the first state whose credit is rated as a junk bond.

The soda tax isn’t isn’t news either. The Board of Cook County (which includes Chicago) has been wrangling with it for months. With just about every other tax already hiked, the state is desperately looking for some way to help balance the books. Luckily, they found a broadly popular option in the form of taxing sugary drinks.

Originally, at a penny per ounce, the county’s tax was expected to rake in about $224 million a year. Analysis of a hypothetical statewide penny-per-ounce tax predicted it would raise $561 million a year. The study also estimated that over 10 years, the tax would prevent 116,000 cases of obesity and would lower healthcare costs around $733 million, as it dissuaded people from buying sugary drinks.

The soda tax mimics similar sin taxes—taxes on habits that lower life expectancy, incur health risks and raise health care costs. Taxes on soda have been adopted in Mexico and several U.S. cities: Philadelphia, San Francisco, Boulder, Seattle, Berkeley and Oakland. Although more research is needed to determine exactly what changes the tax will have on customer behavior, our best picture, courtesy of a study on Berkeley’s tax, suggests that the price of sugary drinks rose by 8 percent, and their consumption fell by 21 percent.

But speaking of falling, Cook County’s proposed tax hit a stumbling block when the Board found out that people on food stamps, around 900,000 in all, would get a pass on the tax. Federal law prevents state and local taxes from being applied to SNAP. For the most part, this has been a reliable guideline, but here its logic breaks down.

Let’s take a tally: Who is the largest group of soda consumers in proportion to their percentage of the population? Black people. What demographic is most disproportionately reliant on SNAP? Black people. Which privileged coterie is most subject to the kind of obesity and diet-related health issues that soda consumption has been linked to? Blacks and Hispanics.

The plan’s implementation was halted until July 12 by a judge last week—based on a claim filed by food businesses backed by the American Beverage Association—that should the tax be found unconstitutional, there is no system in place for getting a refund.