Why focus on soda and other sugary drinks?
Soda and other sugary drinks are the number one source of added sugar in the American diet, and are linked to increased risk of type 2 diabetes and other chronic diseases, like heart disease, obesity, and tooth decay. Big Soda specifically targets children and teens and in 2013 spent $866 million to advertise unhealthy drinks to this target market. The facts on sugary drink consumption are striking:
- A 20-ounce bottle of soda is equivalent to 22 packets of sugar.
- 2 in 3 California teenagers drink at least one soda or other sugary drink each day.
- Drinking even one sugary drink per day significantly increases the risk of Type 2 diabetes.
- Liquid sugar affects the body in a unique way that increases one’s risk for diabetes more than sugar in food.
- Big Soda spends roughly $500 million per year marketing sugary drinks directly to youth, bypassing parents.
- Big Soda targets low-income and communities of color - spending more than $1 million per day marketing to children.
- Over 37% of Oakland adolescents are overweight or obese.
- Tooth decay, the leading chronic illness in children, has been linked to the consumption of sugar sweetened beverages
If we want to tackle the diabetes epidemic, focusing on soda and other sugary drinks will have the greatest impact and save lives.
What’s included in the tax?
Measure HH focuses on the distribution of sugary drinks that are high-sugar and low-nutrition. Sugary drinks that will be included are soda, energy and sports drinks, sweetened iced teas and lemonades, juice with added sugar, and syrups that go into sugary drinks at cafes like Starbucks (like Frappuccinos). Certain drinks are NOT included in the tax: infant/baby formula, beverages for medical use, meal replacement beverages, milk products, and 100% fruit or vegetable juices (with no added caloric sweeteners), and alcoholic beverages (which are already heavily taxed). The measure language can be found here.
Who will be taxed?
Measure HH is not a sales tax on consumers. This is not a tax on retailers. This is a tax on Big Soda’s distribution companies that contract with beverage makers to distribute their products in Oakland. Small businesses will be exempt.
How much is the tax?
The tax rate is a penny per fluid ounce. For syrups, the tax rate is calculated based on the final volume of drinks produced by the syrup.
Where will the money go? How will the Community Advisory Board work?
Measure HH is estimated to generate $6-8 million per year and all tax revenue will go into the city’s general fund. Accountability is written into the measure: the measure creates a Community Advisory Board with representatives from health, dental care, and nutrition, as well as parents from the Oakland Unified School District and residents of communities most impacted by the negative health effects of sugary drink consumption. The Board will make recommendations to the City Council about funding programs that improve children’s health and will issue annual public reports detailing the impact of funded programs.
Who supports the tax?
Measure HH has wide community support. The measure was put on the November ballot with unanimous support from Oakland City Council, and has been endorsed by a long list of community members, local businesses, public health organizations, and the health and dental communities.
Has a tax like this passed before?
Yes - in November 2014, Berkeley was the first city in the U.S. to pass a 1-cent-per-ounce tax on the distributors of sugary drinks. Since the tax went into effect in March 2015, Berkeley has allocated over $1.5 million to support community nutrition and health programs.
Do sugary drink taxes work?
Yes! Sugary drink taxes are modeled on other effective taxes, like tobacco taxes. Sugary drink taxes have been successful in reducing sugary drink consumption and raising revenues for health promotion. Mexico successfully passed an excise tax on sugary drinks, reducing the purchase of sugary drinks by 12% overall, and by 17% among low-income Mexicans. Berkeley’s sugary drink tax (Measure D) passed with 76% of the vote in 2014. On January 20, 2016, the Berkeley City Council allocated $1.5 million in tax revenues to fund community nutrition and health programs that reduce sugary drink consumption and address their negative health effects.