A commentary by Professor Barry Popkin was published online by Philly.com (the online site for the Philadelphia Inquirer and Daily News). Dr. Popkin explains how the tax will affect individuals across the income divide, and answers whether the tax will be effectively “regressive”:
The beverage industry and the few progressives who align with it call these taxes “regressive,” warning that they that hurt the poor. Regarding Philadelphia’s proposed tax on sugary drinks – 3 cents per ounce – which will fund programs that stand to benefit lower-income families the most, this concern is misplaced.
Since January 2014, Mexico has had a 10 percent tax on sugary drinks. An analysis of the differences between sales of sugary drinks before and after the implementation of their excise tax reveals valuable insight that should be considered in the case of Philadelphia. In Mexico, where rates of obesity and diabetes are among the highest in the world (and equal those of Philadelphia, except Philadelphia has more extremely overweight citizens, mainly in lower-income subpopulations) overall sales of sugary drinks decreased by 12 percent by the 12th month of the new tax.
But the decrease in sales from low-income consumers was more than 17 percent by the 12th month of the tax, while those in the higher income brackets changed a statistically insignificant amount. Thus our research has found that indeed more tax was paid by higher-income Mexicans, while the poor, who continue to buy the drinks, purchase fewer of them.
Over the same time, sales of untaxed beverages (mostly bottled water) increased 4 percent, and in yet-unpublished work, we know the poor increased water purchases by a much greater amount. In other work under journal review, we show the highest sugary beverage consumers, particularly among the poor, reduce intake the most.
Enacting a soda tax in Philadelphia might very well turn out to be one of the most equitable taxes in the commonwealth.
Read the full commentary here.