Seattle's soda tax benefits low-income communities, study finds

A new study concludes that Seattle's soda tax isn't disproportionately harming lower-income families — and is actually benefiting lower-income households as a group.

Why it matters: When Seattle officials approved a tax on soda and other sugary drinks in 2017, some policymakers were concerned it would unfairly burden low-income Seattleites.

• That's because past research has found lower-income Americans drink more sugar-sweetened beverages — which are associated with an increased risk of diabetes and other health problems — than the wealthy.

What's new: While other studies have found that soda taxes appear successful at reducing the sale of sugary drinks, few have examined whether they are equitable public policy.

What they did: University of Washington researchers analyzed sugary drink purchases across more than 1,100 households in Philadelphia, San Francisco and Seattle in the first year the cities enacted soda taxes.

• Researchers also looked at how much of the tax revenue was spent on programs that help lower-income households.

What they found: In all three cities, the amount of soda tax revenue sent back to lower-income communities exceeded the money those households paid because of the new tax, the study found.

• That meant the soda taxes created a net transfer of money from higher-income communities to lower-income communities, according to the study.
• “The bottom line is that most of the revenues were raised from higher-income households, and most of the revenues were invested in programs that benefited lower-income households,” James Krieger, an author of the study, told Axios.

Yes, but: Across all three cities, lower-income residents still paid a higher share of their income in soda taxes than wealthy residents.

• For lower-income households, the percentage of household income spent on soda taxes ranged from 0.06% to 0.5%, while in higher-income households it ranged from 0.01% to 0.06%.
• Krieger characterized those percentages as a "very small proportion" of families' overall income, however.

What they're saying: Seattle Mayor Bruce Harrell said the UW study validates the city's approach of dedicating soda tax revenues to programs that increase access to healthy food and child care.

• "...These types of programs are a centerpiece for what Seattle can do to keep kids and families healthy, eliminate 'food deserts' and promote healthier communities across our city," Harrell said in a statement to Axios.

The other side: Seattle City Council member Lisa Herbold, who voted against the soda tax in 2017, said it remains concerning that lower-income people are paying a higher percentage of their income toward the tax.

• That "makes it regressive, regardless of how the funds are spent," Herbold wrote in a text message to Axios.

The bottom line: Government officials considering soda taxes should make sure they establish clear rules directing the money toward lower-income communities, said Melissa Knox, another author of the study.

• That way, policymakers can make sure the revenue "is being put back," Knox told Axios.