Perhaps The Burning Platform summarized the idiocy of Philadelphia’s soda tax better than anyone to date:
In a shocking development, the Philadelphia soda tax is a big fucking fail. Who could have predicted that. Democrat government drones and their brain dead minions are so desperate for money to fund their gold plated union pensions and bloated salaries, they lie, cheat and tax the poor into oblivion. Result: lost jobs, further impoverished poor people, no help for children, more closed businesses, and a further hole in the city budget. But at least the city union workers can keep their gold plated pensions – for now. Maff is hard for liberals, but it always wins in the end.
But, as The Washington Free Beacon points out, the unfortunate side effects of Philly’s disastrous soda tax may not be limited just to the economic consequences enumerated above. As a study by the Tax Foundation recently found, there are social consequences as well with people now choosing to substitute beer for soda in light of the fact that, well, beer is just cheaper.
Philadelphia’s tax on sugary drinks has made soda more expensive than beer in the city.
The Tax Foundation released a new study on the excise tax last week, finding that the 1.5-cent per ounce tax has fallen short of revenue projections, cost jobs, and has forced some Philadelphians to drive outside the city to buy groceries.
The study finds that the tax is 24 times higher than the Pennsylvania tax rate on beer.
“Purchases of beer are also now less expensive than nonalcoholic beverages subject to the tax in the city,” according to the study, written by Courtney Shupert and Scott Drenkard. “Empirical evidence from a 2012 journal article suggests that soda taxes can push consumers to alcohol, meaning it is likely the case that consumers are switching to alcoholic beverages as a result of the tax. The paper, aptly titled From Coke to Coors, further shows that switching from soda to beer increases total caloric intake, even as soda taxes are generally aimed at caloric reduction.”
While not terribly surprising, the study found that while Philly’s soda tax was sold to taxpayers as a way to raise money for local schools, less than half of the proceeds are actually being used for that purpose.
The Tax Foundation points out that unlike most cities, Philadelphia passed the tax specifically to raise revenue, not to fight obesity. The city even includes diet sodas in its tax, as a way to raise money for pre-kindergarten programs.
However, less than half of the $39.4 million collected since the tax went into effect on Jan. 1 has gone to education funding.
“[T]he tax was originally promoted as a vehicle to raise funds for prekindergarten education, but in practice it awards just 49 percent of the soda tax revenues to local pre-K programs,” Shupert and Drenkard write. “Another 20 percent of the soda tax revenues fund government employee benefits or city programs, while the rest of the money will go towards parks, libraries, and community schools.”
Meanwhile, lower soda sales have already started to claim the jobs of grocery and soda distribution workers.
Collections from the soda tax are also well below original projections of $92 million per year, due to tax avoidance.
“Soda sales in Philadelphia have also declined since the tax went into effect at the beginning of 2017, threatening the long-run sustainability of the tax,” Shupert and Drenkard write. “According to some local distributors and retailers, sales have declined by nearly 50 percent. This is likely primarily due to higher prices, which discourage purchasing beverages in the city.”
Earlier this year PepsiCo announced it was laying off up to 100 workers because of the tax, which the company blames for costing a 43 percent drop in business.
Philadelphians are also no longer able to buy 12-packs or 2-liters of Pepsi products in grocery stores due to the tax, the Tax Foundation said.
Way to think it through…