Philly's Soda Tax Is Shaping Up To Be An Epic Flop

Authored by Ernest Owens via PhillyMag.com,

It’s been six months since the city’s soda tax (or, more accurately, the sugary beverage tax) was implemented — and it’s off to a rocky start.

The city is currently $20 million short of its projected $46 million goal to close out the 2017 fiscal year, and based on the most available month’s numbers, it doesn’t appear as though they will reach it.

But I’m not surprised by any of this. By the time last June when Mayor Kenney pulled a fast one on City Council to strike the deal, I had already warned about the consequences in lower-income communities.

The bottom line is simple: Sugary beverages can be found in abundance within the corner stores of poor neighborhoods that lack healthier options. For this tax to succeed, it would basically require already impoverished people to spend more for what is often the only viable beverage option in their food desert. (And let’s stop acting like poor people aren’t humans who can rightfully crave other things besides water and milk.) This tax was never geared toward improving health (because it never provided healthy alternatives for such neighborhoods) — it serves as a regressive way of garnering revenue for the city’s fund, universal pre-K, and other community endeavors.

So why is the soda tax not bringing in the the dough? It’s easy: Lower-income families know how to budget when it comes to things they simply can’t afford. A trip to an Aldi grocery store in West Philly last weekend showed me exactly how folks are fighting the tax. One family I spoke with, for example, is now buying beverages in bulk and going back to making powdered drinks like Kool-Aid and lemonade.

Although it’s called the soda tax and I’m not much of a soft-drink consumer, I’ve personally noticed that the juice-based drinks I buy have gone up a lot. This past Sunday, a bottle of Ocean Spray cranberry juice cocktail was being sold for $6 at CVS. Fortunately, I had a 30 percent discount credit on my CVS card, and I bought four bottles to take full advantage of the deal. The new policy at my house is that sugary drinks are bought only when they are on sale, and I often stock up when that day comes.

As the temperatures have soared, I’ve noticed near a few transit stops what appears to be a small black market in the works selling soda. Earlier this week, I purchased a 24-ounce can of Arizona iced tea for a dollar from a guy who was selling them in coolers in the back of his truck; across the street that same can was being sold for nearly double. As we get closer to the summer, I can only predict that more of these hustles will pop up.

Workarounds like this are definitely hurting the soda tax, and I don’t care — mainly because the Kenney administration never provided the city a plan B. When it comes to policies that are supposed to help underserved communities, the people who are part of them shouldn’t have to fork over most of the bill. I would have been more satisfied if this tax had been part of a larger program of budget cuts across the board. If the city has the money to help redo LOVE Park, it should also be able to invest in our children’s future and provide safer neighborhoods for them.

Otherwise, we appear to be hypocrites exploiting an ever-larger gap between the city’s have and have-nots. My fellow Ivy League friends and the Center City yuppies who advocated for the soda tax are health nuts who don’t even drink soda. The irony is that some of them now recognize the clear class conflict that this represents — if they (with higher incomes and employment) aren’t pouring their wages into buying soda, who is? For some, it’s almost a moral dilemma that they now feel some guilt over: “Tax my damn Fiji water,” a friend of mine working at City Hall says. “It’s a luxury I’m willing to pay to save the schools.”

The soda tax ultimately will fail because the city overestimated and underestimated at the same time. It overestimated the income it would receive from a change that noticeably affects people’s wallets. While an 1.5-cents-per-ounce rate seems low, the city wasn’t as straightforward about how distributors would adjust prices in light of the tax — that’s why we’re seeing 12-ounce cans sell for close to a dollar now. Second, the tax underestimated the budgeting ingenuity of lower-income consumers; growing up in a working-class family, one of the biggest lessons I learned is how to be thrifty.

Perhaps the administration should have learned more about its taxpayers before promising such a big yield.

 

Comments

a Smudge by an… ufos8mycow Mon, 06/19/2017 - 21:04 Permalink

Thrifty rich liberal. The state didn't offer a plan B? Like what, opening state run healthy beverage stores across from the bodega?If poor urban shoppers started reaching for water and unsweetened iced tea you don't think they would carry these products? Especially as these sound like the higher margin product all the sudden. The truth is the vendor carries what their customers demmand. Which is soda. And pruple drank.

In reply to by ufos8mycow

geo_w hannah Mon, 06/19/2017 - 20:25 Permalink

Philadelphia has long ago killed the golden goose, by overtaxing its citizens. Anyone that could, moved their families and business out of that hell hole 20 years ago. Philly's problem now is they have no base left to tax their way out of trouble. Dems have created an island of poverty that the remainder of the state is tired of supporting. The dems in charge are so incompetent they won't even incentivize business to come back. Fat dumb and happy. Have another soda mr. mayor and city council.

In reply to by hannah

Things that go bump hannah Mon, 06/19/2017 - 22:41 Permalink

My mom made ours in ice cube trays (the old metal ones) with toothpicks for sticks. There were no fancy rubbermaid molds when I was a kid. She never bought soda except for that nasty Diet Fresca that no one else would drink. That was a treat our dad bought us once in a while when we were out running errands with him (it might have been to the bar). I can still remember the taste of Orange Crush after 60 years. It had little bits of orange pulp floating in it.

In reply to by hannah

BeanusCountus montresor (not verified) Mon, 06/19/2017 - 21:11 Permalink

Or how bout a tax on kid sports activities, all beef, pizza, ice cream, triple the taxes on alcohol, bread. All of it supposedly "bad" for you. Hell, tax air. The minute you start breathing it you are on your way to dying. And who among us wants to be denied the right to live like a vegetable for as many of those "golden" years as possible so your family can go bankrupt while you pee your pants and shit your drawers.

In reply to by montresor (not verified)

PlayMoney Mon, 06/19/2017 - 18:00 Permalink

It'll be just like the boat tax 25 years ago. They think everything happens in a vacuum and don't take into account human behavior. The boat tax brought in LESS revenue and almost bankrupted the industry. Liberals will never figure out that the more taxes you put on something the less we will buy. DUH!

Vilfredo Pareto Mon, 06/19/2017 - 18:03 Permalink

I figured the tax was achieving its intended purpose, reducing soda sales.  We really need a huge sugar tax applied at every level of transactions involving sugar (of any type).   Sugar is almost a s as bad as tobacco if you look at death statistics. 

Ban KKiller Mon, 06/19/2017 - 18:04 Permalink

Liberals couldn't get the sugar tax passed in Santa Fe, NM either. Money was going to fund pre-K. But....everyone knows the people in NM don't give a rats ass about education. NM is not at the bottom of the educational curve without trying! If folks become educated they would stary lynching the Legislature, the judcial and the executive branch of wonderful NM. Sugar tax made no sense for so many reasons.... See the stories about the idiot DAs in NM? I'm high on colas...oops.