Berkeley Soda Tax Fizzles Out
The soda tax passed last fall by voters in Berkeley, California – the first such city ordinance in the country – has fizzled at raising retail prices for high-calorie sugary drinks by less than half the amount expected, according to a Cornell University and University of Iowa study. The law, which took effect this March, imposes a penny-per-ounce tax on distributors of sugar-sweetened beverages, such as soft drinks, energy drinks and presweetened teas. Distributors pay 20 cents per 20-ounce bottle of Coke, for instance. Tax proponents expected the extra cost to result in higher prices for shoppers, which would discourage soda consumption.
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A tax with no consequences? Free money to the City? Will be addicting.
That is a rather steep tax. I haven’t purchased a sugary drink from a machine in ages. But I would be a pit annoyed to discover my 12-ounce can of Coke or my 20-ounce bottle cost 10 cents to 20 cents more than it was prior to the tax. At my office, drinks out of the machine cost $0.50. I buy the sparkling water, but a 12 cent tax on a soda would boost the cost by 25%.