Opinion

Grocery, beverage taxes hurt working families

An assortment of soft-drink brands at a Cypress, Calif., market. (Photo: David Tonelson, via Shutterstock)

While health and wellness must be a top priority for communities across the US, taxing the poor is not the way to do it.

Taxes such as these place a considerably larger share of the economic burden on working families, poor communities and small business owners. There is a significant need for measures that will create healthier, more prosperous communities, but to achieve this vision, the economic health of every community must be not only considered, but placed front and center.

Excise taxes have negative consequences for small businesses who bear the burden of implementing the tax, and they overwhelmingly effect minority populations and working families.

Similar proposals have been introduced across the nation with the promise of reduced consumption, but the results may not be what they seem. Berkeley was the first US city to implement a beverage excise tax and stated that they saw a decline in consumption. However, according to NPR, the Berkeley report is based on consumers’ memories and “that people in Berkeley may be underestimating their consumption because they don’t want to admit that they’re still drinking lots of soda.”

On the other hand, an excise tax passed in Philadelphia reported a similar reduction in sales of sugar-sweetened beverages but also found (according to the same NPR story), “a very large increase in sales of soda and other taxed products at stores that are located zero to four miles outside the city.”

Citizens in Philadelphia were travelling outside city limits to buy their beverages where the tax wasn’t implemented. This tactic proved to be disastrous, with union representatives reporting over 100 layoffs and local businesses reporting having to cut over 300 jobs. Local businesses are a big part of what makes a community and these losses are devastating, something their wealthier counterparts don’t have to contend with.  According to news reports, one of the most devastating results of this tax is the closing of a local supermarket where city residents now have less access to fresh food and everyday grocery staples – creating a food dessert in an already impoverished neighborhood.

Not only do excise taxes have negative consequences for small businesses who are required to bear the burden of implementing the tax, they also overwhelmingly effect minority populations and working families.

Residents are now being priced out of the communities they have lived in for generations because of the increase in prices of everyday commodities like food and beverages. Though these taxes are sold as solutions for low income and minority populations, they disproportionately fall on these individuals themselves, creating yet another economic obstacle for those who are already battling to make ends meet, pay their bills, and take care of their families.

Implementing taxes that further increase inequality is counterproductive. Instead, we must work to put forth policies that benefit the overall health of communities and promote the economic prosperity of working-class and minority populations.

I hope that California’s lawmakers will carefully contemplate the unintended consequences they are placing squarely on the backs of working and poor families before considering whether to place yet another burden and economic hurdle on communities that are already struggling.

It’s time to invest in the health and wellness of underserved communities, but a tax on working-class families is not the solution.

Editor’s Note: Donna Smith is the Chair of the Advisory Board of  Progressive Democrats of America.

 


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