The City of Richmond, CA. may be about to pass a first-in-the-country sin tax, on Soda. In November the citizens will decide whether or not the city will levy a 1 cent per ounce on sugar sweetened drinks within the city limits. The nanny-government types think this is marvelous for obvious reasons. The city believes they might get as much as $3 million on the deal. They can’t both be right.
Estimates of this nature assume a static model, that is the population under review will continue to act as they did before the tax was assessed. Trouble is, it doesn’t usually happen. If you tax an activity it will tend to decrease. I grant you than an extra 16 cents on one McDonald’s lunch may not be a big deal. If you have a family of four or five, and you don’t have a lot of money, maybe it is. If you are going to buy a couple of 12-packs, or maybe a few two-liter bottles, maybe you will do your shopping across the city line.
Is this a public health issue? Is it tax policy? Is it both. The Health Nazis are thrilled the money will be available for programs to fight childhood obesity. Trouble is, there is nothing in the plan that directs the funds to those purposes.
It will be interesting to see how this goes. If it passes, it won’t be the only place it will happen.