January 15, 2017


People Really, REALLY Hate Philadelphia's New Soda Tax (Brad Tuttle, 1/09/17, Money)

A Philadelphia Inquirer infographic showed exactly how the tax is impacting the price of a wide range of beverages. A 16-ounce Monster Energy drink listed at $2 goes up to $2.24 due to the sugared-beverage tax. A 64-ounce jug of V8 Splash Carrot Orange Juice listed at $2.39 goes up to $3.35. A 20-ounce bottle of Coke Zero--which contains no sugar, but gets affected anyway because diet sodas are also hit with the tax--that used to cost $1.99 is now $2.29.

Because the tax is applied on a per-ounce basis, the price increase on larger items is particularly steep. A 32-ounce Gatorade formerly priced at $1 rises to $1.48 after the new tax is applied. A 128-ounce iced tea listed at $2.50 shoots up to $4.42. And all of that doesn't include normal sales tax of 8%, which also pumps up the final bill.

The list of what is and isn't taxed can be confusing. Basically, all sodas and energy drinks (including diet and sugar-free) are hit with the new tax, as are fruit juices that are less than 50% juice, plus any sports drink, tea, or coffee drink that contains sugar or artificial sweeteners. Plain old bottled water and fruit juices that are more than 50% pure juice are exempt--but products such as Vitamin Water and almond milk, which have sweeteners, are taxed just like Mountain Dew or Dr. Pepper.

The Tax Foundation noted that as a result of the new tax, beer can now be cheaper than soda or energy drinks in Philadelphia. The sugared-beverage tax is 24 times higher than the tax applied to beer sales--and after all taxes are added in, a 12-pack of Propel energy drink costs more than a 12-pack of Icehouse beer. "Before sales taxes, 12 Propels is $5.99 plus $3.04 in soda taxes for a total of $9.03 (and that's when it's on sale for $1 less than the $6.99 standard). The 12 Icehouses are $7.99, beer tax included," the Tax Foundation explained. [...]

Many others have said that they'd cut back on soda purchases altogether--which, after all, is partly what motivated the law in the first place. The new tax was sold as an easy way to raise $91 million annually for city schools and public spaces. But Philadelphia also became the first major city to pass such a tax because proponents hoped to improve the health of citizens. Studies show that nearly 70% of kids are overweight or obese in North Philly, and the city as a whole has the second-highest rate of obesity among the country's biggest metropolitan areas.

Raise alcohol taxes.

Posted by at January 15, 2017 8:27 AM