Philadelphia may like to think of itself as the “city of brotherly love,” but its latest tax increase is not so friendly to the poor.
Last week the city council passed a regressive soda tax proposal that will levy 1.5 cents per liquid ounce on distributors. According to Quartz, the tax will apply to regular and diet sodas, as well as other drinks with added sugar, such as Gatorade, lemonades, and iced teas.
This tax on sugary drinks is what is often called a “sin tax.” This is an excise tax that is specifically intended to target certain goods deemed harmful to society but that we don’t want (or can’t) ban completely, such as tobacco or alcohol. The idea is that by adding or increasing the tax, it increases the overall price of the good, thereby lowering consumer demand.
Sin taxes are a form of sumptuary law, a law that attempts to regulate permitted consumption of particular goods and services. Throughout history sumptuary laws have been used to reinforce social hierarchies or class-based discrimination. Normally this would be done by prohibiting certain social classes from being able to purchase a good, like the 16th-century French law that banned anyone but princes from wearing velvet. But modern sin taxes try to express the same types of social disapproval in more subtle ways.
For example, since the poor tend to consume more sugary drinks, forcing them to pay a high tax on such beverages is a way to signal a class-based disapproval without coming out and saying so directly.
But the public understands, at least intuitively, that the tax isn’t merely about health costs to the state. Such taxes are intended to make a moral judgment about what people should or shouldn’t consume.
Advocates of sin taxes are generally right about one thing: they do tend to lower consumption. Sin taxes tap into the basic law of supply and demand, that if you raise the price of a good or service it will lower the demand. (For some reason, lawmakers understand this fact when it comes to the cost of sugary drinks but ignore it when it comes to increasing the cost of labor through minimum wage increases.) The problem with this approach is that the tax isn’t high enough to reduce consumption enough to truly change people’s behaviors. So all that it really does is make certain goods and services more expensive for those who can least afford it.
The poor tend to drink more soda than wealthy Americans because soda is cheaper than most other options. Even with the increased tax a can of Dr. Pepper from a vending machine is always going to be cheaper than a soy macchiato latte from Starbucks. All the tax does is takes more money out of the pockets of those who don’t have much to begin with.
The tax won’t affect public health, but that’s not really its purpose. In an age when vices are treated as virtues, taxing sugary drinks is one of the latest means of using the law to express public morals.
