Sugar-Sweetened Beverage Tax Case Analysis

Regressive Nature of the Tax

The taxation is particularly criticized for placing a disproportionate burden on low-income people. As suggested by the case study, because low-income and nonwhite Americans drink more regular soda than other populations, they would face the greatest direct impact of the tax. “Regressive is regressive is regressive,” said Councilwoman Maria Quinones-Sanchez, owing to the potential economic burden on vulnerable populations (Novick et al., 2018). However, the design of the tax itself minimized some features of regressivity: Sugar-Sweetened Beverage Tax Case Analysis.

However, adding diet beverages, which are consumed more by higher-income people, somewhat balanced the impact of the tax. Also, what had to be considered was that the main aim was funding necessary social programs like universal pre-K, which, in the long term, might benefit low-income communities for educational opportunities. This may offset the potential long-term social benefits against the short-term financial burden, suggesting that, although having features of a regressive tax, its broader social investment might offset these concerns.

Ethical Implications of Tax Allocation

The ethical complication of the tax’s fund allocation is high. While Mayor Kenney had publicly sold the tax as a way to pay for universal pre-K and children’s programs, a quarter of the revenue was used to backstop the city’s low fund balance and underfunded pension system. This multi-purpose allocation raises ethical questions about transparency and policy intention. The case indicates that the administration was not entirely candid about the full revenue allocation, with Council President Clarke voicing frustration about the late disclosure of fund balance considerations.

From an ethical perspective, this approach could be seen as potentially manipulative—using popular initiatives like pre-K to generate support for a tax that also serves broader municipal financial needs. However, the balance of argument can also be made that addressing municipal financial stability enables the continuation of public services. The ethical stance depends on whether one prioritizes governmental transparency or views the broader fiscal strategy as ultimately serving the public interest.

Factors Enabling Tax Passage

Several decisive factors helped make the sugar-sweetened beverage tax a success. First, Mayor Kenney framed the tax as being for the funding of some favorite initiatives of pre-K and shifted the discussion from health interventions to economic and educational benefits. Another important factor was the coalition “Philadelphians for a Fair Future,” which included civic, labor, and faith organizations, among others (Novick et al., 2018).

The timing was everything politically as well: a new city council of different composition and less entrenched industry connections proved more receptive. The negotiation strategy of the administration-reducing the tax rate from 3 to 1.5 cents per ounce and the inclusion of diet beverages-served in building broader support. Also, the personal political positioning of the mayor gave him more flexibility. The ultimate success of the tax thus depended not on one but a combination of framing, coalition building, political maneuvering, and timing.

Tactics of Principal Players

The mayor presented a multicharacter approach. Mayor Kenney rebranded what was purely a health intervention into an economic investment. He built a broad coalition to undertake targeted negotiations and persistence in the face of historic failures. His messaging always came back to real community benefits.

While resistance was evident by Council President Clarke, he ended up adjusting and settling on brokering the rate of the tax, arguing its regressivity, and acquiescing at a point it seemed to go through. Lacking the utter, unfettered authority exerted in recent past administrations required greater give and take.

The American Beverage Association countered with some quite aggressive strategies, spending 10.7 million dollars on campaign efforts. They tried to rebrand the tax as a “grocery tax” and pointed to job losses and economic impacts. However, all their efforts eventually came to naught in preventing the passage of the tax.

Diet Beverage Inclusion

Including the tax on diet beverages was a political way to extend the tax. The presence of diet drinks in the tax base would permit the city to adopt a lower tax rate, and the tax would be less regressive. As the case study notes, diet soda consumption rises with income, so increasing the tax base and diminishing the regressivity of the tax. The approach showed political pragmatism-skewed use of a more palatable policy compromise that would take the edge off regressivity without killing the revenue projections (Wilensky & Teitelbaum, 2023).

Epilogue and Future Implications

The Philadelphia case provided a groundbreaking model for many jurisdictions. In passing a tax on sweetened beverages in a large, diverse city, Philadelphia showed that policies of this kind can be implemented outside of liberal, homogeneous environments like Berkeley (Novick et al., 2018). This was achieved by framing the tax as one dealing with economic development rather than as a health intervention, thereby shifting the policy debate.

By November 2016, four other cities and one county had passed similar taxes, suggesting the broader inspirational impact of the case. Philadelphia showed that strategic messaging, coalition building, and focusing on concrete community benefits were important in seeing the policy through to implementation.

References

Novick, L.F., Morrow, C.B., & Novick, C. (2018). JPHMP’s 21 Public Health Case Studies on Policy and Administration. Wolters Kluwer.

Wilensky, S. E., & Teitelbaum, J. B. (2023). Essentials of health policy and law (5th ed.). Jones & Bartlett Learning.

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Assignment #2

PH 528

Directions: Read the “Beverage Tax Case Study”, which describes the Philadelphia sugar-sweetened beverage tax. Respond to the following questions, with each response a minimum of 150 words.

Due Date: Upload your assignment to Blackboard as a .doc or .docx file by 11:59 PM on Sunday 2/2.

Questions:

1. The coalition against the “grocery tax” and certain members of the City Council opposed the sugar-sweetened beverage tax because they believed the tax was regressive and disproportionately and unfairly burdened low-income people. Do you agree? Why or why not?

 

2. The mayor framed the sugar-sweetened beverage tax as a strategy to fund universal pre-K and other programs for children rather than framing the tax as a health behavior intervention. Yet part of the proceeds of the tax went to fund city deficits and pensions. Comment on the overall ethical implications of this aspect of the case.
   

   Sugar-Sweetened Beverage Tax Case Analysis

 

3. Mayor Kenney managed to pass a sugar-sweetened beverage tax in a city that failed to pass it twice before. Discuss the factors that allowed the proposal to be successful.

 

4. Describe the tactics used by three of the principal players in the case: the mayor (Kenney), the President of the Council (Clarke), and the American Beverage Association. Comment on the successes and failures of their actions.

 

5. Why was the tax extended to diet beverages? Do you agree with the justification?

 

6. Comment on the conclusion of the case as described in the epilogue. Has Philadelphia provided a strategy for other cities to follow?

 

Case Study Source: Novick, L.F., Morrow, C.B., & Novick, C. (2018). JPHMP’s 21 Public Health Case Studies on Policy and Administration. Wolters Kluwer.