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On Aug. 2, Cook County became the largest government in the United States to charge a tax on sweetened drinks.
The debut of the penny-an-ounce charge for drinks sweetened with sugar or non-caloric sweeteners wasn’t exactly smooth, nor was it particularly well received with the soft drink-consuming public. Customers who examined their receipts at some stores found they had been charged extra for flavored seltzer water -- which is not subject to the new tax -- while restaurant patrons discovered those "free" refills now cost one cent per ounce.
As soft drink consumers and sellers came to grips with the new charges, the libertarian Illinois Policy Institute – never a fan of any tax, and a particularly harsh critic of the tax habits of Cook County and Chicago – framed the drink tax in a consumer unfriendly light.
"The new tax will make soda sold in Chicago among the most expensive in the country," the institute said in a tweet and in the headline of an article on its website.
That is a little like proclaiming the sun rises in the east, but given intense public interest in the soda tax we thought it was a worth a look anyway.
Accompanying the institute’s tweets were graphics illustrating the various taxes that now will be paid by those purchasing sweetened drinks in Chicago.
Chicago already charged a 3 percent soft drink sales tax, and that was on top of a 10.25 percent sales tax that includes state and local portions and is the highest of any major city in the United States.
For a 12-pack of 12-ounce cans or bottles of any sweetened soft drink, regular or diet, the sweetened beverage tax adds another $1.44. Thus, a 12-pack priced at $4 costs $5.97 at the register. The new tax adds 67 cents to a two-liter bottle. If marked on the shelf at $2.49, the new tax means you’ll pay 40 percent more at checkout.
That’s how it works in Chicago, where the total price figures to be slightly higher than in the rest of Cook County even though the soda tax applies in the suburbs as well. Does that make Chicago-bought soda "among the most expensive in the country?"
The institute grants its statement a lot of leeway by using the word "among."
Wherever the thirsty buy it, a Big Gulp is a Big Gulp is a Big Gulp. So the add-on cost of taxes is likely the prime factor behind any significant price differences. To date, the list of places embracing a soda tax is an extremely short one, hence Chicago’s (and Cook County’s) emergence as among the most expensive places to pop for a pop.
As it stands today, Cook County is one of only eight U.S. locations to impose or plan to impose a per-ounce tax on sweetened drinks. The other seven are cities and, with a population of 5.2 million, Cook County is by far the largest jurisdiction to adopt such a tax.
Issue-wise, this is right in the Illinois Policy Institute’s wheelhouse. It not only piles expense onto an extremely popular category of consumer products, but it also comes swathed in nanny state good intentions for the health of Cook County residents. By strange coincidence, this health concern arrives just as Cook County finds itself in desperate financial straits. (In another article, the institute claims Cook County can’t even get its nanny state act right, as federal rules prohibit applying the new tax to sweetened drinks purchased with food stamps. It notes that "polling shows people with lower incomes are more likely to drink soda.")
At one cent per ounce, Cook County is on the lower end of the soda tax scale. In Boulder, Colo., that two-liter soda will cost an extra $1.35 and a 12-pack will be $2.88 more. Cook County is also one of the three jurisdictions in which voters did not voluntarily adopt the tax by referendum. (Illinois has no provision for such referenda.)
There have been many complaints that Cook County’s soda tax was sold to voters as an anti-obesity measure but also includes drinks containing non-caloric sweeteners. But the ordinance itself contains extensive language citing studies that link even diet drink consumption to kidney disease, metabolic syndrome, type 2 diabetes and obesity.
Cook County and the city of Philadelphia are the only places where drinks sweetened with non-caloric sweeteners also are subject to the tax.
Thus, even among the eight places in the nation taxing or preparing to tax consumers by the ounce for sweetened soft drinks, Cook County’s measure reaches an especially broad swath of consumers.
The Illinois Policy Institute cites Cook County’s new sweetened drink tax as making soda sold in the city of Chicago "among the most expensive in the country."
With Chicago already charging the nation’s highest sales tax of any major city plus a 3-percent soft drink tax, it’s almost certain that consumers in the city paid "among" the highest prices for soft drinks in the country even before the Aug. 2 arrival of the sweetened drink tax.
But Chicago truly moved into a select group when its home county joined the seven other cities that have enacted or are poised to enact by-the-ounce taxes on sweetened soft drinks.
With a nod to Captain Obvious, we raise a glass of flattened, left-out-in-the-open Coke in the direction of the Illinois Policy Institute as we rate this statement True.
Comparing Local Soda Taxes in U.S., Center for Science in the Public Interest, Dec. 2016; accessed Aug. 3, 2017
Cook County Sweetened Beverage Tax Ordinance, Cook County Government; accessed Aug. 3, 2017
U.S. Census Bureau, Quick Facts: Cook County, Illinois; accessed Aug. 3, 2017
Chicago, Illinois Sales Tax Rate, Avalara TaxRates; accessed Aug. 3, 2017
What’s the Deal with the New Soda Tax?, Chicago Magazine, June 27, 2017; accessed Aug. 3, 2017
Cook County soda tax goes into effect despite appeal, Illinois Policy Institute, Aug. 2, 2017; accessed Aug. 3, 2017
Cook County soda tax exempts food stamp purchases, Illinois Policy Institute, Aug. 3, 2017; accessed Aug. 3, 2017
Soda tax rollout leaves Chicago-area shoppers grumbling, confused, Chicago Tribune, Aug. 3, 2017; accessed Aug. 3
This city now has America’s highest sales tax, Fortune, July 16, 2015; accessed Aug. 3, 2017
First U.S. soda tax cuts consumption beyond expectations, Reuters, Oct. 28, 2016; accessed Aug. 3, 2017
Berkeley breaks through on soda tax, Politico, Nov. 5, 2014; accessed Aug. 3, 2017
Philly: Soda tax revenue to fall short, Philadelphia Inquirer, June 13, 2017; accessed Aug. 3, 2017
Judge blocks Cook County soda pop tax, Chicago Tribune, June 30, 2017: accessed Aug. 3, 2017
The Sugar Sweetened Beverage (SSB) Tax At A Glance, city of Boulder, Colo.; accessed Aug. 3, 2017
Soda Taxes Win Big In California, Huffington Post, Nov. 9, 2016; accessed Aug. 3, 2017
Seattle will tax sugary soda — but not diet, Seattle Times, June 5, 2017; accessed Aug. 3 2017
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