To ring in the new year, Seattle implemented a new tax on its residents: the dreaded sugary drink tax. Now, we know just how much the tax will hurt consumers.
How bad is it?
Pricing labels at a Seattle Costco have garnered much attention because they show just how much soda and other sugary drinks now cost Seattle residents. A CBS News manager tweeted pictures showing the price increase of two drinks.
In the first case, the price of a case of Dr. Pepper (36 cans) nearly doubled. According to the picture, Costco sells the soda for $9.99. But with an added tax of $7.56, the soda now costs customers $17.55. In the second case, Costco sells a case of Gatorade for $15.99. But the tax adds $10.34 to the price, which brings the total cost to $26.33.
Despite the steep new prices, Costco was there to remind customers who live in the Seattle city limits that the tax doesn’t apply to its nearby locations outside the city.
What did Seattle do?
Last June, the Seattle city council passed a 1.75 cents per ounce tax on sugary drinks. The tax affects sodas, energy drinks, sports drinks, juice and other non-milk based products. Non-milk based drinks include many of those sold at Starbucks and other coffee shops. Diet drinks and those from small distributors are exempt from the tax.
Distributors are required to pay the tax. However, the added cost has been directly passed on to consumers in most cases.
The purpose of the tax, Seattle’s progressive leaders allege, is to help thwart people from purchasing the drinks. Much of the tax will be used to fund programs designed to educate young people on making healthy choices.
Do other U.S. cities have a similar tax?
Yes. In 2015, Berkeley, California, became the first U.S. city to implement a sugary drink tax, otherwise known as the “soda tax.”
Many of America’s most progressive cities and municipalities followed suit, including:
- San Francisco and Oakland
- Portland, Oregon
- Albany, New York
- Boulder, Colorado
- Cook County, Illinois, where the city of Chicago is located
Maryland and Virginia also levy a statewide soda tax.