After 71 Days, Cook County Realizes Their Mistake and Repeals Soda Tax

Yesterday, the Cook County Board of Commissioners voted to repeal the disastrous sweetened beverage tax. After going into effect back in August, the tax has united 87 percent of residents in opposition due to its adverse economic impacts. With a super majority voting in favor of repeal, shoppers and businesses will no longer have to bear the burden of the penny-per-ounce tax starting December 1st.

In addition to the county’s sweetened beverage tax, Chicagoans already pay a 3 percent tax on soft drinks. Adding both on top of Chicago’s sales tax rate of 10.25 percent (the highest of any major city), soda sold in the city is among the most expensive in the country. According to research from the Illinois Policy Institute, “a two-liter bottle of pop with a base price of $2.49 now costs $3.49, an effective 40 percent combined tax rate on soda.” In fact, the county’s tax on sweetened beverages is more than five times higher than Illinois’ state tax on beer and alcohol.

When consumers are faced with higher prices on goods, they will end up reducing their purchase quantity. This law of economics holds true in Chicago as small businesses are struggling to offset  loss of revenue from the lack of soda sales. As a result of sagging sales, employers are  cutting hours from their employees or not filling vacant positions. In total, the impact of Cook County’s beverage is tax devastating with an estimated 6,100 lost jobs, $321 million in lost wages, and $1.3 billion in lost economic activity.

Repealing the soda tax represents a big victory for taxpayers in Chicago, but with the county needing to make up $200 million in revenue we must be prepared to fight any new tax increase that they propose. This decision should serve as a model for similar cities across the nation where soda taxes are hurting local businesses, shoppers, and workers. Taxpayers in these cities must hold their local officials accountable to overturn these harmful policies.