If you’re planning a trip to Philadelphia in the future you may want to plan on drinking plenty of water. Or, if you prefer soda as your beverage of choice on vacation, be prepared to shell out more cash. The City of Big Brotherly Love is preparing to send a big tax increase on pop for a vote after months of heated debate. Of course, as always, they’re doing it for the children. (Route Fifty)
The model being considered for adoption in Philadelphia is notable in two respects. Firstly, the estimated $91 million raised from the tax each year won’t necessarily be slated for health initiatives, something oft-described by critics as part of the so-called “nanny state.” Instead, the city’s mayor touted the tax as a new revenue stream for universal pre-kindergarten education and library renovations.
Secondly, if the measure is approved by the full city council, it will torpedo one of the biggest rhetorical weapons the soda industry has used to denounce soda taxes. Ever since Berkeley, California passed a tax of its own in 2014, the industry has characterized the win as only achievable in such a super-liberal enclave. A win in Philadelphia would deflate that reasoning, and perhaps trigger health advocates in cities across America to copy the measure.
The city’s Democratic leadership is trying to paint this as some sort of revolutionary moment (pun not intended) but it’s just more of the same old sin tax spin and nonsense. Any time the government tells you that it’s establishing a tax on something so the money can go to this or that cause (in this case, education) they are selling you a bill of goods because money is fungible. If they weren’t getting the cash from this soda tax they would have to pull it from somewhere else. When you hand over tax dollars which go into the overall revenue pool you are funding everything the government does whether you approve of it or not.
As far as Philadelphia not being a “super-liberal enclave” like Berkeley… give me a break. I’ll grant you that the demographic breakdown of Philly is somewhat less extreme overall than Berkeley (I worked there for six years and know the area pretty well) but that’s like saying the atmosphere on Mars is less extreme for a vacation than on Venus. You’re going to die in a few seconds in either place.
As to the scale of this robbery, the Tax Foundation reminds us that what Philadelphia’s mayor is looking to do is massively above and beyond the sin taxes we see on alcohol.
Three cents an ounce is a very large tax, and the largest soda tax proposal I’ve seen since I started writing about this issue in 2011. Thought of another way, that’s 36 cents tax per can of soda, or $4.32 tax per 12 pack of soda. For reference, a 12 pack of beer is subject to an excise tax rate of $0.09 in Pennsylvania. So this proposal would be an excise tax 48 times larger than the current beer excise tax.
Usually we see Democrats pushing sin taxes as a way to save us from ourselves and there’s certainly an element of that theory in play here. But telling people they need to pay more as a measure to fight obesity doesn’t seem to sell very well, so now it’s being twisted around and retooled as an education measure. In the end it’s all the same. What the city wants is to charge the residents more taxes to grow the government. Since most of their citizens are generally opposed to that idea, they have to put some lipstick on this pig to build public support. Ironically, it will be the poorest citizens (who tend to drink more soda than wealthier families) who foot the bill while being the ones least able to afford it.