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Seattle’s overburdensome soda tax has failed to create the outcomes City leaders expected

About the Author
Mark Harmsworth
Director, Small Business Center

A recent, peer-reviewed report has demonstrated soda taxes don’t create the outcomes the government that imposes them, might want to see. Predictably, the Seattle soda tax did not improve ‘health outcomes’ as city leaders expected from the punitive tax. Instead, consumers just switched to a different beverage, beer.

As the Washington Policy Center has previously highlighted, soda taxes don’t have the outcomes the proponents expect.

In 2018 the city council and mayor of Seattle imposed a special tax on “sweetened beverages,” sharply increasing the consumer cost of all soda drinks sold in the city. The tax is imposed on the distributor, but it is paid by consumers in the form of higher retail prices. The tax falls hardest on convenience stores and other small retailers, especially those located in low-income neighborhoods.

At the same time, city officials claimed the tax would discourage the consumption of sweetened drinks and would deliver several public health benefits. In the years since the tax was imposed, however, none of the health benefits promised by Seattle officials have been realized and now, it’s obvious why.

Savvy consumers just switched drinks to another beverage.

The soda tax effort is similar to other business and consumer punitive taxes that the Seattle City Council has implemented over the last few years. When Seattle created a $4 override on worker pay, stores closed and other businesses left the city. When the City tried a payroll tax, lawsuits were filed and, once again, business began looking to relocate.

When supporters of the original soda tax touted the benefits of taxing sugary drinks, as is typical with ill thought through government schemes, it didn’t work out quite as expected and the policy has had little or no effect on the health of Seattle residents.

The City of Seattle should focus on essential city services and leave the health decisions of its residents to themselves.

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