What to Expect When Taxing Soda

Mark Bittman, he of the How to Cook Everything series of books and resident food pundit at the New York Times, wrote yesterday of the benefits of taxing soda and subsidizing vegetables.

...the food industry appears incapable of marketing healthier foods. And whether its leaders are confused or just stalling doesn?t matter, because the fixes are not really their problem. Their mission is not public health but profit, so they?ll continue to sell the health-damaging food that?s most profitable, until the market or another force skews things otherwise. That ?other force? should be the federal government, fulfilling its role as an agent of the public good and establishing a bold national fix.
Rather than subsidizing the production of unhealthful foods, we should turn the tables and tax things like soda, French fries, doughnuts and hyperprocessed snacks. The resulting income should be earmarked for a program that encourages a sound diet for Americans by making healthy food more affordable and widely available.

It's a great idea and one state governments have been floating around for a while now. In fact, here in the state of Washington, Passed a few laws doing exactly that.
So what happened? I-1107 happened. Here's what I wrote last October:

When the American Beverage Association heard that Washington state was now taxing soda pop, they leapt into action. It is reported that they had spent an estimated $1 million gathering petition signatures for the July 2, 2010 statewide deadline to help put this initiative on the ballot.
Since that time they have donated an astounding $16,727,750 to fight these taxes. The have created false and misleading advertisements, saying things such as:
1)Taxing food and beverages is just plain wrong. It hurts middle-income families, seniors and other people who are already struggling to make ends meet during difficult economic times.
2)Taxing thousands of common food and beverage products sets a dangerous precedent. If we don?t repeal these tax hikes now and send a clear message, the politicians will think they can get away with raising taxes on other grocery products in the future.
If we were to tax foods of substance, let's call it nutritious food, then it might be wrong. But the state of Washington took care to define these taxable items in such a way that made it clear that the newly taxed items were foods that added nothing of substance to our diet. We don't need bottled water, we don't need candy bars. At no point did the conversation come up that was along the lines of "Hey, let's tax apples." That simply did not happen.
As far as the "sets a dangerous precedent" line, let me point out that alcohol has been taxed here for quite some time. Taxing soda or chocolate bars is not taking us into a scary new "tax every consumable" world.
The American Beverage Association knows this. But here's the thing. They don't want you to associate Pepsi and Coke with Budweiser and Miller. What they want is for you to associate the products that they are lobbying for with chicken, fish, and bread. They want you to believe that every item in a grocery store inhabits a sacred area, and once entered, it means that the product is inherently good for us.

The result of the initiative? The voters rejected the taxes that the State Legislature had tried to instill upon the the makers of soda. It wasn't even close. Those voting to reject the tax had,522,658 votes, and 60.44% of the electorate. Those voting to retain the tax had 996,761 votes and only 39.56% of the electorate.
The ABA came in, spent $16.5 million dollars (and, fun fact, they were the primary funder of this initiative, by far. The next donor only gave $100), outspending the supporters of the tax by a ratio of 54 to 1.
Or, to put it in more stark terms, the soda industry didn't like being taxed, came in to the state of Washington, and essentially bought an election by lying and misrepresenting the facts of the soda taxation.
The result? The state of Washington is out $352 million dollars over the next five years. And, as predicted, we are having problems paying for education, police forces, and elderly care.
So, yes, by all means. Let's tax soda and candy. But know this - we're going to be in a hell of a fight.