Seattle Mayor Ed Murray this week proposed taxing so-called "sugary drinks" to pay for new health and education programs that would serve people of color. But not the super-sweet drinks that Starbucks sells inside its own stores.
It's a variation on the "soda tax" that's on the books in San Francisco, Oakland, Pittsburgh, and Boulder, Col. It would cost the distributors two cents an ounce and would raise an estimated $16 million a year.
In his State of the City address, Mayor Murray gave few details, except to note that energy and sports drinks (such as Monster, Red Bull, Gatorade, Powerade) would be included, as would fruit drinks (such as Sunny D) and pre-sweetened teas and ready-to-drink coffee drinks.
On the other hand, 100-percent fruit juices and diet drinks would be exempt, as would any coffee beverages prepared in-store.
So your Frappuccino would be taxed if you buy it at the supermarket (where it's distributed by Pepsi), but exempt if you get it at a Starbucks. The so-called Starbucks Loophole was first noted by the Puget Sound Business Journal.
The Washington Beverage Association immediately came out in opposition to the proposed tax, calling it a "highly regressive" measure that would make prices skyrocket.
Murray's predecessor, Mike McGinn, proposed a one-cent per ounce tax on sugary drinks three years ago to help fund the arts. It was opposed at the time by none other than Ed Murray.
The Centers for Disease Control and Prevention has said soda taxes are “the single most effective remedy to reverse the obesity epidemic,” and a similar tax in Berkeley, Calif. reduced the consumption of sugary drinks by 20 percent.
DISCLOSURE: I own fewer than 100 shares of Starbucks stock.
