Taxing Sugary Drinks in Philadelphia
For those that don’t know, the City of Philadelphia is in need of some serious cash. Lower-than-expected tax revenues and increased expenses (such as with snow removal) has led to a budget shortfall. So, one of the potential proposed remedies, along with a trash pickup fee, is a soda tax.
What’s a soda tax? For our purposes, it’s a tax of two cents per ounce of sugary drinks. It may not sound like much, but if it were applied, a 75 cent 12 ounce can of soda now becomes 99 cents. That two liter bottle now costs about 68 cents more in city tax alone. A six pack of 12 ounce cans is now $1.44 more.
Needless to say, this proposed measure, which is expected to raise about $77 million a year, has not generated a positive reaction. Still, it’s becoming part of the growing trend of taxing “sins.” Last year, there was a proposed federal tax on soft drinks that was defeated. Subsequently, about twelve states including California and New York have proposed alterations to how soda is taxed. Chicago now taxes soda by three percent. The reasoning is supposedly based in health: New York justifies the tax proposal by noting the public health crisis of obesity and how sugared beverages contribute to obesity. I’m sure the potential $465 million it could raise was an afterthought.
Still, the soda tax seems more likely than not to come to fruition. Now, if it’s the difference that prevents closed libraries and shut down city services, then I’m all for it. Then again, I haven’t had any soda in sixteen years, so maybe I just am not as affected.