Philadelphia’s Soda Tax Seriously Backfires


With visions of dollar signs in their eyes, the Philadelphia City Council instituted a soda tax that did drive up the bank accounts for some body… but it wasn’t the city of Philadelphia!

So, whose bank accounts got fatter if not the city tax coffers? Turns out that Philly residents just left the city and bought all their pop in neighboring communities. Their sales went up and the city’s went down.

The soda tax was also aimed at forcing Philadelphians to make better drink choices.

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Yeaaaah, no.

As HotAir reported:

Wonders never cease. People stopped buying their soda in the city (and almost undoubtedly a lot of other shopping list items) and decided to shop where prices were lower. The study they reference also goes on to note that there was no corresponding increase in sales of bottled water or healthier beverage options. And as for the revenue question? They don’t even delve into that, but you can do the math easily enough. The tax on soda increased by 17%, but the sales fell by 51%.

Hotair also crunched the numbers to show that the tax actually brought in less money than before the tax!

So, let’s look at this assuming one million ounces of soda was sold anually before the tax went into effect. If sales had remained the same, the city would have realized $62,400.00 in revenue instead of $54,300.00. But with the volume cut in half, they managed to slash their revenue to $31,200.00. (I was told there would be no math. Apparently City Hall in Philadelphia was operating on the same assumption.) Great job, guys. You gutted your revenue stream, caused layoffs in the beverage industry and depressed sales in the city’s retail outlets, likely impacting entry level jobs.

The soda tax also cost the city some jobs when the local Pepsi plant fired 100 workers because its sales slumped.

Once again we see that liberals are too stupid to understand how life, economics, and people work.

Follow Warner Todd Huston on Twitter @warnerthuston.

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