What do you think about putting a levy on the distributors of sugary drinks? Please vote. Stay for the week's best economy links and the haiku.
This week Seattle Mayor Ed Murray proposed a 2 cents per ounce tax on distributors of sugary drinks that might bring in $16 million a year. In turn, the new funds would “support various programs aimed at reducing disparities in education outcomes between the city’s white students and students of color,” my colleague Daniel Beekman reported.
Philadelphia is one of several cities that are trying the soda tax, in this case 1.5 cents per ounce. A six-pack of 16-ounce beverages would cost an additional $1.44 in taxes. This week, supermarkets and distributors said they were preparing to make layoffs, claiming sales were down 30 percent to 50 percent. Officials dismissed this as fear-mongering.
Still, there’s little economic argument that if you want less of something, tax it. So revenue projections can be notoriously unreliable. Also, soft drinks are especially favored by poorer people, who already have less disposable income and are supposedly a core concern of this mayor and City Council. They are already feeling price increases at fast-foot restaurants, partly imposed to pay for the higher minimum wage. In other words, the soda tax is a regressive tax.
Supporters can point to the calories in sugary drinks and their contribution to obesity and other health problems. These ills can affect children, too. Slowing this consumption down is good, they say. Also, the revenue from taxes can go to social programs.
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What do you think?
This Week’s Links:
• Ponzilocks and the $24 trillion question | Econospeak
• Wasteful healthcare spending | Tim Taylor
• Whom to listen to in the Fed minutes | Tim Duy
• Death and tax cuts | Paul Krugman
• China’s weapons of trade war | Project Syndicate
• Is the border adjustment tax a good idea? | Tyler Cowen
Today’s Econ Haiku:
Buffett was with her
But he’s getting rich with Don
Big money’s funny