Chicago’s soda tax repealed

Yesterday, by a vote of 15-1, the Cook County Finance Committee voted to overturn our recent and much-despised 2¢-per-ounce tax on sodas. I’ve written about it several times before, and will say here only that it’s a Nanny Tax—part of the government’s increasing effort to control the private lives of Americans—and that it was also hypocritical, for the rationale given for the tax (health, not revenue), doesn’t explain why diet sodas weren’t taxed.  There’s a final vote today by all the Commissioners, but it’s already a done deal.

The repeal was due to several factors, most importantly a loud and public negative reaction to the tax, not only on grounds of “nannyism,” but because Cook County is in a huge financial hole and they’re trying to tax everything to get out of it. We now have a 7-cents-per-bag fee for every plastic bag bought in a store (something I approve of, for it reduces litter and saves the lives of animals), but this is on top of that, and it’s a regressive tax on the poor. Further, it wasn’t working well: people were actually driving across the border to Indiana, or to adjacent counties, to buy soda.

Finally, as the Chicago Tribune noted, Chicagoans aren’t stupid, and realized that the tax was almost entirely about revenue from the outset, yet the pro-tax ads mentioned only health. That was seen as hypocritical:

Preckwinkle has admitted from the beginning she had a budget shortfall she needed to deal with, but sugarcoated that message with one about how this tax would make Cook County residents healthier. Then, when the tax was in jeopardy, she allowed former New York Mayor Michael Bloomberg to bombard us for weeks with a television ad warning how soft drinks are harming minority communities.

Though the ad happened to be true, the timing made it seem insulting and condescending. It assumed that African-Americans and Hispanics, unlike everyone else, didn’t know that sugary drinks are unhealthy. And that minorities, again like everybody else, choose to drink sodas anyway because they enjoy them.

Grownups hate being told what to do, especially when they know the message is insincere.

True, the sale of sugared sodas is injurious to the overal health of society. But it’s also salubrious for many people’s well being. And lots of things whose absence would improve societal health aren’t taxed, like candy bars, red meat, and bags of sugar. You can always find a health justification for infringing on people’s diets (unless they’re vegans), and so many readers applauded the soda tax when I wrote about it. But as of December 1, it’ll be gone, and I’m glad of it.

61 Comments

  1. Randy schenck
    Posted October 11, 2017 at 10:59 am | Permalink

    Does the bag tax include trash bags as well? Seems like Chicago is getting desperate.

    • infiniteimprobabilit
      Posted October 11, 2017 at 11:51 pm | Permalink

      New Zealand is about to ‘ban’ (by popular demand and voluntary action of the supermarkets) free supermarket plastic bags.

      Personally, I think this is misguided – IMO the humble supermarket plastic bag is extremely efficient packaging, made from ultra-thin plastic offering the best possible payload-per-pound of material used, and extremely re-usable. Compared with the grossly wasteful heavy clear plastic bubble packaging that many products come in, and which is never re-cyclable.

      What will supermarkets do instead? Charge a few cents per bag? – well, that’s okay, but whether it will reduce usage much remains to be seen. Worst case is if they try to make the bags multi-use by making them of heavier plastic, and people still forget to take them back to the store and just pay for more and then discard them anyway, the tonnage of plastic used and wastefully dumped in landfills could actually increase.

      cr

      • Randy schenck
        Posted October 12, 2017 at 6:04 am | Permalink

        Sorry, did not see this until now. I recall several years ago in Germany they had no plastic bags or paper bags in the grocery. You took the groceries out to your car in the cart and put them into your car. Most people had cardboard boxes in their cars.

  2. Curtis
    Posted October 11, 2017 at 11:04 am | Permalink

    If it just a question of finance, Chicago should give free cigarettes and soda to all their employees. The saving in pension costs from early death is much, much higher than the additional health care costs.

    Chicago, most states and the federal government are in debt because of unsustainable payments to retirees who are dying at an older age. Dying young would solve this problem.

    https://chicago.suntimes.com/politics/chicagos-financial-crisis-by-the-numbers/

    • Simon Hayward
      Posted October 11, 2017 at 11:15 am | Permalink

      Trouble is that you are proposing a long-term solution to an acute problem. Of course left unsolved it will be a chronic issue, so perhaps we should go for it 🙂

    • Randy schenck
      Posted October 11, 2017 at 11:37 am | Permalink

      The real problem then is mismanagement of pension funds. The oldest problem in city and state government. One of the biggest reasons for this is because they pay someone outside firm to “manage” the pensions. The company I worked managed their own pension fund and it does very well. No tax money involved at all. Nobody manages a pension plan better than the people who will receive it. You can take that to the bank.

  3. rwilsker
    Posted October 11, 2017 at 11:04 am | Permalink

    Other than being less popular, at least outside of the general anti-vaxxer community, than vaccination, it’s not clear to me how this differs from other uses of taxation to encourage better behavior with respect to a public health crisis.

    Obesity is a terrible problem and getting worse. We all pay the costs of responding to that public health emergency. So why is it wrong that individuals, who by drinking high calorie beverages – one of the worst obesity offenders – contribute to those costs have to pay something to defray the costs their actions will have on the rest of us?

    We can perhaps use the pejorative term Nanny State (though I think labels like that get in the way of objective thought) when the government is pushing an ideological viewpoint, but when the issue is public health and who pays for the costs of dealing with that public health issue, we’re talking something different.

    Polluters have caused enormous damage that they’ve never had to pay for (so we’re paying to line their pockets). Fast food producers push incredibly unhealthy food that creates public health crises (and now are exporting these problems to places like Africa – see the recent NY times article). Should they continue to be held harmless? Would it be Nanny State-ish to force them to directly, or indirectly, to be held more accountable?

    Is the law inconsistent? Sure. Should the funds from it be clearly focused on public health? Yep. Those issues are causes for amending a law, not repealing it (though you can be sure the beverage companies put a lot of money out there to push the Nanny State argument as a rationalization for its repeal …).

    Are people stupid? No. But, as we see more and more everyday, they are quite capable of being manipulated by polished and well-funded campaigns.

    • Posted October 11, 2017 at 11:10 am | Permalink

      Saw this after I posted!

    • Dick Veldkamp
      Posted October 11, 2017 at 11:17 am | Permalink

      Agreed.

      The conclusion from PCC(E) argument about inconsistency of taxation should not be to repeal this particular tax, but rather to develop a consistent system of taxes to promote healthy behaviour and thus save lives.

      And non-interference of government does NOT leave a level playing field (and rational unbiased decision making by the consumer), but rather leaves the field entirely to corporations pushing their unhealthy foodstuff.

      • Posted October 11, 2017 at 11:42 am | Permalink

        Disagree. The government should not be getting involved in matters like this. Taxes as a form of social engineering is always a bad idea.

        I accept that there is some justification for certain kinds of so-called “sin taxes” (such as to alcohol, tobacco and pot) because of their direct and profound effects on health and/or public safety. But such exceptions need to be both compelling and rare.

        Adults should be free to take whatever risks with their health and safety they are comfortable assuming – so long as those risks don’t endanger others health or safety and have no or minimal impact on others rights.

        My $0.02.

        • darrelle
          Posted October 11, 2017 at 12:10 pm | Permalink

          I don’t mean this as an argument for or against this tax or nanny taxes in general, but I’m not sure this . . .

          “I accept that there is some justification for certain kinds of so-called “sin taxes” (such as to alcohol, tobacco and pot) because of their direct and profound effects on health and/or public safety. But such exceptions need to be both compelling and rare.”

          . . . is a good argument against this particular tax. The link between very high sugar intake and obesity, and other health issues, is well enough established and the affects of such magnitude, that it is very arguably reasonable to characterize it as direct and profound.

          • Posted October 11, 2017 at 12:27 pm | Permalink

            There is some traction in your argument, as do many such “nanny-state” approaches; diabetes is a growing and very expensive problem. Education, not taxes is the way to handle that, IMO.

            Nevertheless, obesity and associated metabolic diseases have very complex etiologies and high sugar diets are only a contributing factor. Alcohol, however, is a direct cause of death, to many whom are not even consuming it. Same is true of tobacco. Alcohol can cause more than health issues too, to both the user and those around them; marriages, homes, families, all are routinely destroyed by the devil’s brew. So those exceptions I find tolerable.

            Sugar maybe too, for the impact it has on public health, but the case has not been made to my satisfaction.

            • Gregory Kusnick
              Posted October 11, 2017 at 6:40 pm | Permalink

              “Alcohol, however, is a direct cause of death, to many whom are not even consuming it.”

              Can you explain how alcohol can be a direct (your emphasis) cause of death in people who don’t drink?

              • Posted October 12, 2017 at 3:51 am | Permalink

                Drink-driving!

              • Gregory Kusnick
                Posted October 12, 2017 at 10:57 am | Permalink

                No, the direct cause of death in such cases is trauma due to motor vehicle accident. Alcohol may be a contributing factor in such accidents (as is the irresponsible behavior of the driver), but in the distinction mikeyc is trying to draw between direct effects and effects with complex etiology that have multiple contributing causes, drunk driving deaths clearly belong in the latter category.

      • BJ
        Posted October 11, 2017 at 2:43 pm | Permalink

        So where, exactly, do we stop with regard to taxes for social engineering? Where is the line drawn? Should we tax high-calorie foods? What about driving too much (car accidents are an enormous part of medical costs and deaths every year)? How about engaging in dangerous sports activities like skiing?

        Where does it end?

        • Dick Veldkamp
          Posted October 11, 2017 at 3:48 pm | Permalink

          I think that the fact that it is not possible to “draw an exact line”, does not constitute an argument against social engineering by taxation.

          Suppose we had to write a “General Law for Protection of the Public”, how would we go about it? We would probably first identify the yearly total number of deaths from a number of activities, and then target every activity causing more than 1000 deaths per year (say).

          Some things could be fixed by additional laws (wearing seat belts while driving, no drunk driving) or outright bans (no machine guns). In other areas we could us regulation (maximum salt content of bread, maybe maximum sugar content of sodas, limits on toxic ingredients). Finally there are areas where we can use things like information, warnings and taxation (cigarettes, alcohol, fat, sugar, waste produced).

          Then it would be a matter of choosing the most effective measures, taking into account enforceability, costs and public acceptance. Et voila, that is where your line is.

          Of course this is not perfect, but I daresay we could find a reasonable solution on how much social engineering is desirable.

          • BJ
            Posted October 11, 2017 at 6:59 pm | Permalink

            “We would probably first identify the yearly total number of deaths from a number of activities, and then target every activity causing more than 1000 deaths per year (say).”

            This is just about every single thing we do as people. This is my point. People think they have some handle on what acceptable risks are, or what are reasonable measures of danger. There are 1000 deaths a year from just about every single thing you do every day. From showering to using household items to driving to eating a hot dog (yes, just hot dogs, not food in general, and this would be just from choking) to walking down the street.

            • Dick Veldkamp
              Posted October 12, 2017 at 1:37 am | Permalink

              1000 is just a number in my example to keep it simple. There are other ways to arrive at reasonable numbers.

              Some things are much worse than others in their health effects. Obviously we want to discourage smoking and alcohol, and encourage safe driving, and we are not going to introduce a ban on hot dogs any time soon, nor tax mountain climbing.

              If obesity is racking up the same numbers of deaths as smoking, then of course we should consider taxation of beverages with much sugar. That is just being consistent.

              My point is that it is perfectly possible to draw a line SOMEWHERE. Taxation of some bad things does NOT automatically lead to the government controlling all aspects of your life.

    • Historian
      Posted October 11, 2017 at 11:40 am | Permalink

      In principle, I cannot disagree with you. If it is all right to tax deleterious products to health such as cigarettes and liquor, then there is no logical reason that sugared products should not be taxed. However, the specific situation in Cook County, Illinois made the tax untenable. These circumstances include the following:

      1. The tax included artificially sweetened drinks;
      2. It didn’t include highly sugared products such as pastries;
      3. People in the county feel they are already highly taxed;
      4. The lie that the tax was imposed for health reasons, rather than the real reason which was to raise revenue.
      5. The perception that Cook County government is a cesspool of waste;
      6. The perception that all levels of government in Illinois are corrupt and wasteful.
      7. The opposition of those who in principle oppose the imposition of a nanny state.

      Items 5 and 6 may not be true, but the reputation of Illinois government for integrity has not been sterling. All this added up to was a political disaster for the Cook County Board of Commissioners and particularly the Board President, Toni Preckwinkle. For those who believe that government should play a role in encouraging healthy eating habits, more creative methods will need to be found. In Cook County, a sin tax on beverages is not likely to reappear any time soon.

      • Posted October 11, 2017 at 1:54 pm | Permalink

        I’ll add item 8: Pre-sugared coffee drinks like frappuccinos weren’t taxed either.

    • darrelle
      Posted October 11, 2017 at 12:00 pm | Permalink

      Just a thought, but a general rule regarding leadership that I came across a long time ago may be applicable. The rule is, never give an order that you have reason to believe will not be followed.

      For example, look at the mess that the US’s attempt at Prohibition caused. Human behavior in reaction to imposed restrictions such as these kinds of laws is too complex to accurately model but it seems to vary quite a bit even between very similar circumstances.

      I think it also depends on how much “enforcement” a society will put up with. Prohibition is an example of “won’t put up with that much” while seat belt laws are an example of “somewhat reluctant okay.”

      • Posted October 11, 2017 at 12:30 pm | Permalink

        “The rule is, never give an order that you have reason to believe will not be followed.”

        I dunno. One mark of a real leader is one who takes people where they don’t want to go.

        • darrelle
          Posted October 11, 2017 at 4:39 pm | Permalink

          That’s a good one too, but they are not mutually exclusive.

  4. Posted October 11, 2017 at 11:10 am | Permalink

    I think there is some justification for a nanny tax, especially the one on smoking, in that it allows the gov’t to recover some portion of the money its spends on healthcare for individuals who do engage in the harmful habit.

  5. dabertini
    Posted October 11, 2017 at 11:15 am | Permalink

    “And lots of things whose absence would improve societal health aren’t taxed, like candy bars, red meat, and bags of sugar”

    And this is the biggest problem with the tax. I dunno if I would include red meat there, for in moderation it can be nutritious. Bags of sugar! Oy! But I need bags of sugar to at the very least make baked goods. But if PCC(e) thinks we should pay tax on it, who am I to argue.

    And remember two cans of coke a day is equivalent to 2/3 lb of fat/week. So if you substitute diet pop that is equivalent to zero fat/week. Such is the power of nutritional science.

  6. Posted October 11, 2017 at 11:20 am | Permalink

    One small victory for freedom from the nanny-state.

    But if the government could tax everything that is “bad for us” (i.e., the stuff we like) it would be rolling in money.

    • Dick Veldkamp
      Posted October 11, 2017 at 11:24 am | Permalink

      Not necessarily. It could reduce other taxes. Also fewer sick peple would probably reduce expenses on health.

      • Dick Veldkamp
        Posted October 11, 2017 at 11:25 am | Permalink

        … leading to even lower taxes. 😉

      • Dick Veldkamp
        Posted October 11, 2017 at 11:39 am | Permalink

        “Further, it wasn’t working well: people were actually driving across the border to Indiana, or to adjacent counties, to buy soda.”

        DEar prof PCC(E): In the spirit of an excellent and well known book (available in fine bookstores everywhere): may I politely enquire what your evidence is for that statement? I mean: even if 10% of the people bought sodas out-of-state, there could still be a considerable positive effect on health.

        And now I’ll shut up.

        • Posted October 11, 2017 at 1:55 pm | Permalink

          I didn’t give the number of people driving across state or county lines, but they showed several people saying this on the evening news, and the reporter claimed there were more. So that’s my evidence.

          Plus one of my readers brought me six bottles of diet soda from an adjacent county after hearing me kvetch!

          • Randy schenck
            Posted October 11, 2017 at 4:10 pm | Permalink

            Crossing state lines is a very big business for many reasons including lower taxes. People from Iowa and Kansas and other states go into Missouri by the thousands for cigs. Half the people in Nebraska go to Iowa to spend their money gambling. They have tried passing something in Nebraska for years to stop this with no success.

            • Posted October 11, 2017 at 4:18 pm | Permalink

              Gun purchases too. Over the years NYC has paid the price (measured in thousands of lives) for this neat feature of American political landscape.

  7. Simon Hayward
    Posted October 11, 2017 at 11:25 am | Permalink

    I was ambivalent on this until I got stung buying six small bottles of tonic water a couple of weeks ago. It’s a pretty sharp reminder when it shows up as a line item on the bill (Cook County Sweetened Beverage Tax, or something like that), of course, that’s always a good way for vendors to rub it in.

    Given the messaging, it was bad that the tax was also applied to diet drinks.

  8. Posted October 11, 2017 at 11:53 am | Permalink

    Diet drinks are as bad as HFCS sodas; both should be taxed a $1 per bottle or can. We are bankrupting the country with incredibly bad health conditions mostly linked to obesity

    • Posted October 11, 2017 at 12:04 pm | Permalink

      Then tax people according to their BMI. People who consume soda but aren’t obese are not a “social problem”.

      • Paul S
        Posted October 11, 2017 at 12:18 pm | Permalink

        Then we have arguments that it a tax on the poor or that it will reduce obesity of poor children. Neither of those are true because the tax didn’t apply to food stamp purchases.

      • Posted October 11, 2017 at 12:33 pm | Permalink

        No. BMI works well for rodents but is a highly questionable indicator of health in humans. When I was a competitive athlete my BMI was routinely in the “overweight” range. Now that I am (much) less fit and beginning to spread, I am in the “normal” range.

        BMI is, at best, a rough guideline and is really only meaningful at the extremes.

        • dabertini
          Posted October 11, 2017 at 2:05 pm | Permalink

          BMI does work. It is simply a guide for healthy body mass. Yes, there are exceptions and there is a range of body masses. And remember it is just one indicator of general health.

    • Posted October 11, 2017 at 1:57 pm | Permalink

      There are no conclusive data supporting your claim that diet drinks are as bad for you as HFCS sodas, or at least that’s what I know. Can you cite ALL references bearing on that, one way or the other?

      • dabertini
        Posted October 11, 2017 at 2:03 pm | Permalink

        They are not. In fact they are recommended in place of the regular sodas. And there is no evidence that diet sodas are detrimental to our health.

        • Posted October 11, 2017 at 4:12 pm | Permalink

          No evidence that diet sodas are detrimental to our health? None? Au contraire. There IS evidence…

          “Although these observational data cannot establish causality, consumption of diet soda at least daily was associated with significantly greater risks of select incident metabolic syndrome components and type 2 diabetes.” – Diet soda intake and risk of incident metabolic syndrome and type 2 diabetes in the Multi-Ethnic Study of Atherosclerosis (MESA). Diabetes care 32.4 (2009): 688-694. and “Consumption of diet soda was significantly associated with an increased risk for diabetes in Japanese men. Diet soda is not always effective at preventing type 2 diabetes even though it is a zero-calorie drink.” – Sugar-sweetened beverage and diet soda consumption and the 7-year risk for type 2 diabetes mellitus in middle-aged Japanese men.” European journal of nutrition 53.1 (2014): 251-258.

          …but it is complicated….the data is mixed and it appears that prospective studies are confounded by food and lifestyle choices;

          “To date, prospective observational studies have revealed mixed results, and it appears that reverse causality is a particular problem, since individuals who are at higher risk for weight gain may choose to consume ASBs in an attempt to control their weight or reduce disease risk. As for experimental studies, the evidence currently suggests that obesity risk may be lower when ASBs replace SSBs in the diet. Still, additional evidence from experimental studies is needed to more definitively determine the benefits and risks of frequent ASB consumption.” -“Diet beverages and the risk of obesity, diabetes, and cardiovascular disease: a review of the evidence.” Nutrition reviews 71.7 (2013): 433-440.

          Indeed, these folks found;

          “Sugar-sweetened beverage consumption is associated with a significantly elevated risk of type 2 diabetes, whereas the association between artificially sweetened beverages and type 2 diabetes was largely explained by health status, pre-enrollment weight change, dieting, and body mass index.”

          (The American journal of clinical nutrition 93.6 (2011): 1321-1327.)

      • BJ
        Posted October 11, 2017 at 2:48 pm | Permalink

        All the supposed evidence is the result of studies demonstrating the people who drink diet soda suffer, on average, from being overweight more than the general population. Naturally, this isn’t evidence of diet soda’s deleterious health effects, but of the likely fact that overweight people tend to drink more diet soda than most. Nobody has managed to demonstrate that diet soda or its constituent parts cause weight gain (as far as I’m aware, at least).

  9. Randy schenck
    Posted October 11, 2017 at 2:33 pm | Permalink

    After all the years of higher and higher taxes on cigs and alcohol what has been accomplished. Behavior is not changed very much with tax. If you want to raise money, just tax people fairly and tell them why. If the problem in Chicago is mainly underfunded pensions they better come clean and come up with a real plan specifically for that. A pop tax is not going to do it.

  10. nicky
    Posted October 11, 2017 at 2:41 pm | Permalink

    Sugar,corn syrup, etc. is very unhealthy indeed. If one wants to tax that, one should tax it at the source, or tax any food or drink on its sugar content. I fully agree it is somehow unjust to single out soda’s (known here as ‘cool drinks’ or ‘gaskoeldrank’).
    However and moreover, I do not think taxing will really reduce consumption. There must be better ways (No, I don’t have a solution at hand, but I’m thinking that action along the lines of ‘education’ might possibly be more effective. Note, I dont hold my breath there).

    • Posted October 11, 2017 at 4:16 pm | Permalink

      “Sugar,corn syrup, etc. is very unhealthy indeed.”

      *sigh*. No. No they are not. Excess consumption of “Sugar,corn syrup, etc” can be unhealthy. But they are NOT inherently unhealthy. In fact, exactly the opposite is true; in proper proportions to diet, lifestyle and physiology, sugars -in whatever form- are key elements to a healthy diet.

      • nicky
        Posted October 11, 2017 at 9:20 pm | Permalink

        Yep, that’s correct, the excess…
        I think -this is hypothesis, not yet hard fact- that as soon as they start significantly changing the composition of your symbiontic gutt microbiota they become unhealthy.

      • Posted October 12, 2017 at 3:50 am | Permalink

        They are not naturally found in the foodstuffs of non-agricultural ‘tribal’ peoples unless they are in fruits or honey, are they? They are not essential surely. Did pre-modern Inuit eat sugars?

        These are part of a bigger picture of how the poor & less well educated have shorter life spans & less healthy lives than richer people.

      • dabertini
        Posted October 12, 2017 at 8:16 am | Permalink

        Finally some sanity!

      • infiniteimprobabilit
        Posted October 12, 2017 at 3:19 pm | Permalink

        Agreed. After extensive research (aka 5 minutes Googling) I found a couple of links –

        https://www.newyorker.com/magazine/2017/04/03/is-fat-killing-you-or-is-sugar

        http://www.dailymail.co.uk/health/article-2546975/One-twin-gave-sugar-gave-fat-Their-experiment-change-YOUR-life.html

        TL:DR version: Cutting out *all* sugar / carbohydrates or *all* fats is not good for you.

        My conclusion: You don’t wanna be fat, just don’t eat so frickin’ much.

        On the original topic: I agree just taxing sodas was misguided. Personally, I’d support a tax on *all* sugars, and also on *all* saturated fats.

        cr

  11. John A
    Posted October 11, 2017 at 3:05 pm | Permalink

    “Chicagoans aren’t stupid”. But they were driving across the border to buy soda at 2¢-per-ounce less. How much are they drinking?

    • Paul S
      Posted October 11, 2017 at 3:32 pm | Permalink

      I live 1/2 mile from Cook County, my wife is a cashier at a local grocery. I can tell you soda sales, or pop as it’s call here, increased significantly.

    • Paul S
      Posted October 11, 2017 at 3:37 pm | Permalink

      Look at it like this. A case of pop is $4.99 on a holiday sale, buy two and the $0.02 tax for your $9.98 purchase is $11.52.

    • Gregory Kusnick
      Posted October 11, 2017 at 6:45 pm | Permalink

      They weren’t doing it to save 2¢ an ounce; they were doing it to save 1¢ an ounce. (Jerry’s 2¢ figure is a typo.)

    • infiniteimprobabilit
      Posted October 11, 2017 at 11:59 pm | Permalink

      I won’t even drive across town to buy cheaper gas (since however you cost it, the trip costs more than the savings).

      But most people never do the math…

      cr

  12. Posted October 12, 2017 at 3:34 am | Permalink

    Maybe Chicagoans are not stupid, but people generally are. There is a world obesity crisis & America is leading the way.
    Vulnerable people need protection from themselves, & even more so, from the interests of big business who want to exploit them. The costs to society of consuming large amounts of sweet stuff are …BIG!
    http://www.who.int/mediacentre/factsheets/fs311/en/


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