Many political pundits are trying to decipher the lessons from the 2014 midterm elections. I will not try and do that here. But, some of the most interesting results have come from ballot measures. While many people voted for conservative officials, these same voters voted to legalize marijuana, prevent a personhood amendment, and raise the minimum wage.
One of the most interesting measures that passed was the soda tax in Berkeley. San Francisco voters also voted in favor of the tax, but did not reach the 2/3rds majority needed to pass. (The 2/3rds threshold has to do with California law on new taxes.) Others have tried institute a soda tax. The two most notable examples were New York City and Richmond, CA. Both resulted in the American Beverage Association (ABA), an industry trade group, spending millions of dollars to defeat the measures. The ABA spent a few more million in the recent ballot initiative in Berkeley. By law, companies have a fiduciary responsibility to maintain profits for their shareholders. Thus, my conclusion is that they had to spend this money. They feared profits would decline if these measures passed.
The evidence is fairly clear on the likely effects of a soda tax. Various economists have done simulations to show that a tax will likely decrease consumption and purchasing. The health economists have also simulated how many people will be prevented from getting diabetes and heart attacks. Of course, all simulations are based on assumptions. Since we do not have an actual soda tax yet, it is hard to predict exactly what will happen.
But, early indications from data in Mexico, after their soda tax was instituted recently, is that sales are decreasing. If other assumptions hold up (e.g. that people will not go eat candy instead), Mexico’s policy could have an impact on public health. The effects will be more difficult to measure in Berkeley. Berkeley is a small city with many surrounding urban areas without a soda tax. It also has a population that is often changing, due to the University population. However, it still offers us an interesting experiment to see the possible effects of a soda tax. Particularly interesting will be the effect on Berkeley youth.
A signifiant consequence of Berkeley passing a soda tax is a possible ripple effect. Other cities interested in experimenting with public health policy could think about passing a soda tax. California has often been an experimentation ground for innovative policies. The policies preventing smoking in public places started here, leading the way for cities worldwide to institute these bans.
While libertarians may protest against these policies, people still have the freedom to choose whatever they like to purchase. Taxes already exist on other foods in California, such as restaurant food and frozen meals. The soda tax just adds sugary beverages to the mix, albeit at a slightly higher rate.
Finally, many believe that the actual tax is not the real intervention here. The tax on sugary beverages just gets us all talking about the harms of drinking 10 (or many more) teaspoons of sugar at a time. The media is talking about it. Social media is talking about it. If the tax in Berkeley signals to people that drinking sugar is not the “cool” thing to do, than maybe a few more parents will think twice about buying their kids a sugary drink.