Nation's Capital Braces for New Soda Tax

A Washington, D.C. city council ordinance extending the city's 6 percent general sales tax to "sweetened" beverages -- including diet varieties -- is set to take effect Friday, part of council members' plans to force residents of the nation's capital to make healthier drink choices and collect additional revenue to fill in city-wide budget shortfalls.  Water, juices, tea and coffee won't be included in the tax extension.

Members of the D.C. city council claim the tax extension is a "compromise" -- many favored more strict taxation of soda-type beverages.  Council member Mary Cheh, a law professor at the George Washington University, laments that the new beverage tax doesn't go far enough.  "It is not a soda tax. Instead of that tax, which I favored, the council extended the sales tax to beverages," she told the school's student newspaper.

Before the council's final vote on extending the sales tax to beverages, Cheh had proposed a tax of "one cent per ounce" to be assessed on sodas and other sugared drinks.  Her proposal failed to gain support by other council members, however, and received strong opposition from the business community.

Cheh says the extra tax revenue will help provide funding for her Healthy Schools Act, an already-approved measure that promises to improve nutrition quality of school meals and improve physical education.

But the new tax largely falls flat, in her opinion.  "[I]t did not target soda and thus we lost the opportunity to drive down soda consumption," Cheh says.

But according to Thomas Frieden of the Centers for Disease Control and Prevention, the new soda tax -- which will increase the price of a 12 oz can by about 10 percent -- will likely have a significant impact in forcing D.C. residents to think twice before purchasing sweetened beverages.

In Washington, D.C., an estimated 55 percent of residents are overweight or obese. The new tax on soda comes just months after the city council mandated a five-cent "bag tax" on all paper and plastic bags customers take home from retailers.  Just as the new soda tax is supposedly meant to raise health awareness,  the council claimed that the new bag tax would help raise environmental awareness and cut down on the city's litter.