National Media Not Interested as Philly Soda Tax Collections Flounder
30th November 2017
In June of last year, with much national media fanfare, the City of Philadelphia passed a dishonestly named “soda tax.”
The levy of 1.5 cents per ounce, which taxes not only sugar-sweetened beverages but also drinks containing “any form of artificial sugar substitute, including stevia, aspartame, sucralose, neotame, acesulfame potassium (Ace-K), saccharin, and advantame” after it took effect on January 1, was supposed to raise over $90 million.
Actual collections are falling far short, and appear to be in decline. The national press is uninterested in reporting this result.
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As so often happens when there’s a pot of money and politicians nearby, the funds have been raided for other things. As a result, as of now, “nearly 20 percent of the money raised would go to other city programs and employee benefits.” In August, a column at the Philadelphia Inquirer claimed, based on Tax Foundation research, that “only 49 percent of the funding (this year) actually is slated for pre-K,” the primary justification for the tax.
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Meanwhile, the completely predictable negative economic effects are piling up. Beverage sales were projected to decline by 30 percent. In the early months, it was more like “30 percent to 50 percent,” and even the city’s original rosy projections estimated slight collection declines in future years. Many Philly residents who are going outside of the city to buy their pop are also buying their groceries while doing so. Within just two months of the tax’s implementation, Pepsi and Canada Dry laid off employees, while a major grocer said “he has had to cut 6,000 employee hours,” i.e., the equivalent of 150 full-time employees, and suspected that “he will lose about 300 people.”
Funny how that works.