Philly Admits Soda Tax Is Crushing Local Small Businesses, Expanding "Food Deserts"

Tyler Durden's picture

 Just one week after Chicago shockingly repealed their soda ban following a revolt from local business owners (see: Soda Tax Fizzles In Chicago As Cook County Officials Cast Decisive 15-1 Repeal Vote), it seems that Philadelphia's flirtations with forming a more perfect "nanny state" via the elimination of sugary drinks could be on a collision course with a similar fate.

As WHYY points out today, a survey conducted by Philadelphia's Controller Alan Butkovitz — a longtime opponent of the soda tax — found that nine out of 10 businesses reported revenue loss since the city’s sweetened beverage tax took effect earlier this year. Of those reporting revenue loss, 60% of them blamed the soda tax for their woes.

City Controller Alan Butkovitz today released the results of the Philadelphia Beverage Tax survey that found more than 60 percent of businesses indicated a revenue loss as a direct result of the new tax.

 

Of the 650 businesses that reported a decline in year-to-year revenue, more than 400 attributed “most” or “all” of the decline to the implementation of the Beverage Tax.  The majority of these businesses reported revenue losses of more than 10 percent.

 

“The overwhelming majority of businesses that carry products subject to the Philadelphia Beverage Tax feel a significant impact as a result of the tax,” said Controller Butkovitz.  “The tax has had detrimental effects.”

 

Butkovitz’s team, with help from various business groups, reached out to “more than 1,600” businesses that sell or sold taxed beverages. Response was purely voluntary, and 741 businesses filled out questionnaires.

 

“This is not going to be the comprehensive answer to everything, but I think it does create a serious warning and an attestation of what has been stated by a number of the businesses,” he said during a Monday news conference. “Because I think the administration has minimized and ridiculed the idea that businesses are fighting for survival.”

To our great 'shock', many Philadelphia grocers reported that customers were simply driving to the suburbs to do their weekly shopping which means that local retailers lost not only their soda sales but everything else as well.

Coments

And, as usual, the Office of the Controller noted that this latest misinformed regulatory overstep by Philly's liberal elites is most detrimental to the very same people it was intended to help, namely low-income, inner-city families who can't afford to travel to the suburbs for groceries and who are about to get crushed with higher prices following a wave of business failures.

According to Controller Butkovitz, the areas with the most businesses reporting revenue losses included West Philadelphia along the Market Street and 52nd Street corridors (19139), Hunting Park in North Philadelphia (19140), and areas around Juniata and Frankford (19124).  Many businesses in these neighborhoods reported losses of more than 10 percent.

 

“Consequently, these zipcodes have neighborhoods with some of the highest poverty rates in the city,” said Controller Butkovitz.  “These businesses cannot afford a one percent loss in business – let alone more than 10 percent.

 

“These are also neighborhoods subject to food deserts in Philadelphia. If these stores cannot continue to operate, it will be even more difficult to buy affordable or good-quality fresh food.”

 

Grocery stores reported the most revenue losses followed by convenience stores and restaurants.  Forty percent of businesses indicated they would have to make significant changes to keep their doors open.

 

"The tax seems to be impacting behavior and orientation toward the future,” said Controller Butkovitz.  “Many business owners seem apprehensive about the viability of their enterprises in the near and medium term."

Of course, facts have never really had much impact on political discourse in the past so absent an uprising from local business owners, similar to what we saw recently in Chicago, we wouldn't suggest holding your breadth while waiting for a repeal.

 

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Cognitive Dissonance's picture

But the nanny state is never wrong.

Time to expand the tax to other items until they get it right...er.

<They'll have to pry my Snickers bar from my cold dead hands.>

malek's picture

No they have to expand it nation-wide.
Worked great in 1920...

overbet's picture

and so much for the obamacare tax getting stopped

 

https://www.irs.gov/tax-professionals/aca-information-center-for-tax-pro...

 

 

" The IRS will not accept the electronic tax return until the taxpayer indicates whether they had coverage, had an exemption or will make a shared responsibility payment."

rejected's picture

Worse

"This process reflects the requirements of the ACA and the IRS’s obligation to administer the health care law."

Fascism straight up.

SMG's picture

Communism always makes things worse.  What does it take to get through to these people?

Mtnrunnr's picture

it's not the fucking soda tax. Poor people are getting more poor and whole foods doesn't give a fuck. The soda tax has problems but if, as a retailer or a business, you can't make up that lost revenue (that you got from selling Coke-a-cola) you don't need to be open.

Delving Eye's picture

Philly restaurants should give patrons a free soda with their meal. That would spike their business bigtime, and no one pays soda tax. Problem solved. It's all about sales and promotion. ABC's of business, baby.

not dead yet's picture

It's the retailer that pays the tax. The idiots in Philly were pissed that the retailers passed on the tax to their customers. Margins in the grocery biz are razor thin so those guys who passed the law must have been pretty stupid to think the tax wouldn't get passed on.

Withdrawn Sanction's picture

You probably need to think a lttle harder about that. It is true the demand for groceries in general tends to be relatively UNresponsive to price changes ("inelastic" in the jargon) b/c of the necessity aspect of groceries. The LOCATION choice where one shops is highly elastic (for most--those w/transportation issues are less responsive to price changes b/c they can't be).

That means the burden of the tax falls disproportionately on the INelastic sides of the market. IOW, those who can adjust the LEAST to changes in price (incl the tax) will bear the largest share of the increased tax burden. In turn, that means the grocers who cannot, in the short run, change their locations, and the poor who cannot economically shop elsewhere are hurt the most.

Those, like the city fathers, who claimed retailers will "just pass along the tax" are either misinformed, or deliberately misinforming. It is only partly true in the most general sense. In the particulars is where we see the harm being done. The devil is, as they say, in the details.

Im shocked, shocked, the politicians would screw their own constituents like this.

Mtnrunnr's picture

Soda is soda it isn't necessary. You don't 'need' soda it's just sugar water sold at insane prices and it gives people diabetes and ADHD. If a community falls apart because it is struggling to aford soda then they need to stop drinking soda. What the fuck is the problem here? it isn't like soda produces more economic output like a manufacturing job or something, it is purely extractive to a local economy

Delving Eye's picture

My solution targets restaurants, not grocery stores. 

Rex Andrus's picture

Bullets, pitchforks, stakes through the heart, lampposts, trees, cyanide and knives have worked exceptionally well. Results may vary.

Theta_Burn's picture

its a simple check-mark on the return either yes or no...

jin187's picture

I'ma be on that corner, slangin that cane. Buying cheap from out of town, cutting it with sucralose, tripling my profits. The cops won't stop me, cause they'll be on my payroll. Slip them a sack of Coke™, and they'll do whatever I want.

espirit's picture

Tax the air they breathe.

That ought to kick the can down the road until next week...

jin187's picture

How are you gonna tax the air when everyone in Philly is already an oxygen thief?

silverer's picture

LMAO. Homemade Snickers bars, coming up.

iamrefreshed's picture

But goddamnit these Philly niggers must be saved from grape soda!

jin187's picture

You crackers just don't get it. It's grape DRANK. Soda is orange.

Miner's picture

Are you pissed off at this? 

Then vote in people who will repeal it.

silverer's picture

OK. We all know what time it is, then. It's time to raise the soda tax. That's what politicians do when shit doesn't work. Double down on the pile.

youarelost's picture

Philly, the sanctuary city sucking off the teet of the rest of the state can go fuck itself.

One of the many Democratic shitholes of America

yogibear's picture

Libtards are doing a great job of destroying business.

Speaking of libtards, Michael Bloomberg's media campaign  on being pro-soda tax isn't working.

GunnerySgtHartman's picture

Sh*thole indeed.  I happened to be in Philly several years ago during a summertime city garbage strike - raunchy trash stacked eight feet high on the curbs drawing rats and the streets looking like, well, a garbage dump (perhaps a fitting description anyway, given the run-down condition of the city).

I've never been back, and I never will go back.

Drop-Hammer's picture

What happens when you have niggers and libtard jews running/ruining your city.

ThrowAwayYourTV's picture

Soda is STUPID. But like everything else in this country, it has to be sweet, it has to be shiny, and it has to exciting.

A country full of adult children really.

BarkingCat's picture

Right, what the hell is wrong with drinking water?

I never buy soda when I go out to eat.  I don't  knowingly consume corn syrup. 

I either get unsweetened ice tea or water with a lemon wedge. Squeeze out the lemon into the water - delicious.

Shpedly's picture

Well good for you. You do what like and enjoy but everybody else is entitled to do the same. If they drink soda and consume "God forbid corn sugar", what the fuck business is it of yours?

Miffed Microbiologist's picture

I completely agree! As long as I don't have to pay for amputating your gangrenous leg due to diabetes I'm cool with it.

Miffed

Ralph Spoilsport's picture

I drink Mexican cokes made with real sugar as a treat with a good cheesesteak or sub. Drinking soda pop all the time is just crazy. 

Miffed Microbiologist's picture

When I was in Spain I had a craving for a soda after a 16 mile walk. I ordered a coke with a plate of calamari. A glass of ice with a slice of lemon appeared and then my bottle of Coke. 300 ml! I had to text a picture of it my husband with the caption " I have figured out why there are no land whales in Spain" it was made with cane sugar. Sweet but not overly so.

To be honest I didn't see many people drinking soda there. Beer and
Wine were far more popular.

Miffed

dark pools of soros's picture

lots of soda in the states with real sugar... it satisfies with just a few sips.. they need to ban high fructose corn syrup but america dont grow sugar cane

Shaten's picture

America grows sugar cane, Come down to Louisiana and see the crops.

HRH Feant2's picture

I don't drink soda. I drink selzer water. I make simple syrup and add a small amount of juice, like pure cranberry juice, and voila, custom soda.

It amazes me how much people say for sugar water. That is what soda is.

I like a nice cane sugar root beer. Mabye one every six months.

Obesity in the US is due to many issues HFCS is one. Glyphosate is another.

yarpos's picture

yeah, I stopped drinking glysophate years ago.  I feel much better for it.

jin187's picture

Sugar isn't all that kills you when it comes to these sodas. I know a woman that drank nothing but Diet Pepsi, to the tune of 12+ cans a day. Wasn't overweight, stopped smoking 20 years ago. Dead before 60 of a heart attack.

Ralph Spoilsport's picture

Diet anything is bad if it uses aspartame. Diet Pepsi tastes awful compared to Diet Coke but it sounds like both are equally addicting without quenching your thirst. Lots of sodium in both which is why you have to keep guzzling it. I brew my own ice tea sweetened with Stevia and add lemon.

not dead yet's picture

She could have been drinking water and it would have killed her. Just as too little of a liquid can kill you, dehydration, too much will kill you too. Look it up.

God Emperor's picture

@BarkingCat  WTF, never heard of red wine?

Best drink to have with a rich meal.

not dead yet's picture

Almost every person has some kind of vice many of which the rest of us pay for. We have boatloads of hungry kids getting their taxpayer funded meals because the odds are their parents are pissing away their money on booze or drugs. Instead of getting those kids out of there they stay in a disfuctional home and eventually hit the mean streets and we get to pay for their 3 hots and a cot in the crowbar hotel. 60,000 died from overdoses last year and the taxpayers and the insurance companies, with your premiums, footed the bill. How many hundreds of thousands more Od'd and didn't die and we picked up the tab. We pick up the tab for the carnage on the roads from drunk drivers and the braindeads texting. Thanks to Americans appetite for recreational drugs, yet the drug companies are taking the heat because it's easy to sue them and every ones a victim, we have the DEA, the FBI, jails, the locals, and others collecting their paychecks from tax dollars. We could go on all night with the abusive behavior Americans indulge in and whether through taxes or insurance premiums we pay for it. Kids in their early teens on up are into booze and drugs big especially ecstacy. I don't hear any of you going after ciggies which still enjoy a huge clientel including kids. Idiots go after soda because it's the low hanging fruit and the law makers love it when their citizens demand taxes. 

You over aged SJW's should get off your dead asses and see why Americans are so fat. It's because they are lazier than shit or you have bowed to the educational industry and park your kids in a chair for 10 plus hours in a day from too early an age being fed a steady diet of agenda driven bullshit. Kids today are physical and emotional wrecks as intelligent but completely stupid people think sitting in a chair being fed bullshit is an education. The private schools are even worse. An education is giving a kid skills and work ethic to be an asset to society but instead we get debaters or suckers being strung along by those with an agenda. Like the snowflakes. Can probably quote Shakespeare or do poetry but can't find their ass with both hands or have a work ethic. Those that can do. Those that can't protest and beat up those that do.

Postal's picture

None. Until the obese fucks start demanding that my taxes pay for their poor life choices. Then it it ~does~ become "my business" as I'm paying for it.

not dead yet's picture

There's a lot worse life choices people make than drinking soda or getting fat. How many people get killed or maimed on the highways each year because some guy had too much to eat? The carnage of drugs and booze is huge but since most Americans drink or do drugs not much gets mentioned especially when we glorify the use of both. You're paying huge for all the wars especially for those poor souls who got maimed or their brains scrambled and can never hold a job because the neocons want to rule the planet. Not to mention kids growing up without their dads or Moms who got killed in combat. The Department of Veterens Affairs has a budget of over $160 billion. Add up all the spending for the military from all government departments and it's over a trillion a year. Yet you're probably cheerleading to bomb the Norks and Iranians and got drunk celebrating when Saddam got hung and Qaddafi murdered and turned the channel when the body bags of our young people killed in combat were shown. You know where I see the highest concentration of fat people? In hospitals and clinics, with my wifes health problems I've been in plenty of them, and it's the people that work there and that includes doctors and nurses. I've seen quite a few paramedics, male and female, over 300 lbs.

Withdrawn Sanction's picture

The emergence of HFCS is a response to the sugar subsidies paid to US sugar producers. Except for a few geographic locations, the US is ill-suited to sugar production, just as it is ill suited to coffee or banana production. We import virtually all of our bananas and coffee, but very little sugar. Why?

Because the sugar interests lobbied CONgress for price supports (subsidies) and got them. Consequently US consumers of sugar (incl. soda mfrs) pay prices that range from 2 to 5 times higher than the world sugar price. The tax, like all taxes, harms consumers AND foreign producers of sugar who can produce sugar more economically than we can. But it also forces innovation/substitution into non-cane sugar alternatives, like HFCS. (HFCS has a whole host of problems in addition to the ones associated w/sugar...google it.)

The more I study, the more I realize EVERYTHING the government touches turns to sh*t in short order. That seems to be in the nature of applying force to human relationships. Call it the inverse of the Midas effect.

Shpedly's picture

So people who drink soda are stupid? Get off your high horse already. Frigging idiot.

juangrande's picture

People who drink soda 50% or more of all ingested liquids are stupid, yes. Or maybe just dysfunctional. Basically asleep, which is the same cause of so many american symptoms!

captain whitewater's picture

Democrat dogooders suck cocks in hell and on earth.

nmewn's picture

Well ya gotta admit, they really don't care who they tax the living shit out of...as long as they TAX!!!

They are "equal opportunity" thieves ;-)

not dead yet's picture

It's a day of celebration when the doogooders pack their chambers and demand a tax. Like they died and went to heaven. Instead of using that windfall to reduce other taxes they created more programs to spend it on. Last I heard rather than kill the programs they were going to fund with the tax the people in Philly are borrowing money to make up for the shortfall that in their dreams was going to be a windfall.