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This topic comprises 4 pages: 1 2 3 4
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Author
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Topic: People really hate Philly's new soda tax
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Mike Blakesley
Film God
Posts: 12767
From: Forsyth, Montana
Registered: Jun 99
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posted 01-12-2017 05:52 PM
I don't think this is a violation of the forum's no-politics rule... if so please take it down, mods. But since it will impact all of our business when it inevitably goes nationwide, it deserves discussion.
People Really, REALLY Hate Philadelphia's New Soda Tax
by Brad Tuttle
Updated: Jan 09, 2017 1:13 PM Mountain
Philadelphia passed a soda tax last June, becoming the first big U.S. city to approve such a measure. So it should have come as no surprise when the resulting tax of 1.5¢ per ounce of sugary beverage went into effect at the start of 2017.
But based on the reaction of many Philadelphia shoppers, plenty of people were either unaware of the new tax or didn't understand exactly how it would work. What appears to have caught many off guard is that the tax applies to far more than just sugar-laden sodas: The tax also hits sugar-free soda, sports drinks, energy drinks, iced tea, lemonade, and even some milks and fancy bottled waters.
Even more alarming to shoppers is how much the tax can add to the bottom line—in some cases hiking the cost of a beverage by more than 50%.
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.
Understandably, shoppers haven't been happy to see that their normal beverage purchases suddenly cost an extra 25%, 50%, or more. One 7-Eleven employee in Philadelphia said she was "yelled at all day" by angry customers on the first day the tax went into effect. People have taken to social media to gripe as well.
Some have noted that the sugared-beverage tax could hurt Philadelphia businesses, because circumventing the tax is as simple as hitting a supermarket or convenience store just outside the city limits.
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. Article
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Leo Enticknap
Film God
Posts: 7474
From: Loma Linda, CA
Registered: Jul 2000
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posted 01-12-2017 07:13 PM
quote: article
But based on the reaction of many Philadelphia shoppers, plenty of people were either unaware of the new tax or didn't understand exactly how it would work.
Exactly, precisely, the same thing has happened here with CA's plastic bag tax. A ballot proposition passed in November, to the effect that supermarkets can now no longer give away carrier bags with your shopping: the only ones they can provide are "reusable" ones (a bad joke: try reusing a TJ's brown paper bag after it's had any significant weight in it, and you'll wish you hadn't), and they have to charge a minimum of ten cents per bag.
Two days after this came in, a checkout girl at my local Trader Joe's told me that she'd been reduced to tears by the amount of abuse she'd received as a result of being on the sharp end of that.
It's funny how tax measures that relieve you of a serious amount of money, but in a hidden or less obvious way (e.g. a sales tax hike) annoy and polarize people a lot more than a trivial amount, but levied in a very clear and open way (e.g. you pay 30 cents for some carrier bags, or have no way of getting your shopping to the car).
Gordon Brown understood this in Britain in the late '90s, hence his political opponents invented the phrase "stealth tax" to describe the very clever methods he used to separate his compatriots from an impressive amount of their money in a boiling-the-frog sort of way. The soda and carrier bag taxes are about as unstealthy as you can get, and will probably end up biting the politicians who championed them in the rear; even though the amount of money we're talking about is tiny compared to other taxes that receive almost no complaints or attention.
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Bobby Henderson
"Ask me about Trajan."
Posts: 10973
From: Lawton, OK, USA
Registered: Apr 2001
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posted 01-12-2017 08:22 PM
That soda tax is just plain stupid. It's an overly simplistic "solution" for a very complicated problem. I don't see it having any positive effect on obesity and other health problems in the Philadelphia area. The people who drafted the legislation obviously didn't have much legitimate input from medical and nutritional experts.
Regular soft drinks like Coca-Cola are bad for you. The big offender is high fructose corn syrup. But that goop is widely used in many different kinds of food products, not just soft drinks. It's even in a bunch of breads.
The artificial sweetners in diet sodas aren't good either, but at least those kinds of drinks aren't going to spike the insulin levels in your blood stream and add to your waistline. By the way, there's nothing natural about High Fructose Corn Syrup either. Just as many strange chemicals are used to create that crap.
I really don't get this law lumping in drinks that are sweetened with natural sugars, such as sports drinks like Gatorade. Naturally sweetened sports drinks are actually a good thing to drink during or after a work out. They're probably not so good to drink for someone that never gets off his ass all day. Chair potato at work and couch potato at home. Consumers do have to read labels carefully. There are plenty of fruit juices, teas, energy drinks and sports drinks that are loaded with high fructose corn syrup.
I have no problem with "sin" taxes on cigarettes or alcohol. Abuse of either one leads to serious health problems and the latter can be a risk to public safety (drunk driving, violence toward others, etc.). Obesity, heart disease, adult onset diabetes, etc. are problems mostly related to overall diet and lack of physical activity. The consequences of those diseases are creating a huge burden to taxpayers, medical service providers, insurance companies and it's making the cost of health care continue to spiral upward like it has for over 20 years. Making any meaningful progress on the nation's obesity epidemic is going to take a lot more than just making people drink a little less Coca-Cola.
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Bobby Henderson
"Ask me about Trajan."
Posts: 10973
From: Lawton, OK, USA
Registered: Apr 2001
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posted 01-13-2017 10:19 AM
quote: Scott Norwood
This sounds a bit like what happened in Virginia with lottery funds. Virginia law requires that 100% of revenues from the state lottery be used for the benefit of public schools. On the surface, this sounds like a good idea, since few citizens are likely to oppose a program that provides money to schools. What has happened is that all lottery revenues do indeed go to public schools, but the amount of money in the state's general fund that is designated for public schools has been reduced by a commensurate amount. The result is, of course, that schools have no additional money, but that the general fund has increased significantly.
The same kind of nonsense happened with lottery funds here in Oklahoma. The public schools system in this state is reeling, thanks to policy makers handing out tax cuts as candy to pander to voters. Then oil prices tanked, causing a huge amount of state funding to suddenly disappear.
Meanwhile brick and mortar retail across the United States is struggling badly. A big part of that problem is sales tax. Retailers with a local presence and physical store front have to collect it on every purchase. But many online merchants do not. For a bigger ticket item like an HDTV set, computer system, DSLR, etc. the difference on sales tax can add up to hundreds of dollars. That big price difference on tax alone has increased in many cities and towns. Many have passed measures to help fund infrastructure projects or pay police or teachers more competitively. If you're paying upwards of 10¢ worth of sales tax on each $1 spent it's very tempting to just order the item from Amazon and save all that money from sales tax.
Here in Lawton the Kmart store that had been here since before I was born closed down in December. The Sears location in Central Mall is closing at the end of March. It's looking like the entire Sears-Kmart business could fold before the end of 2017. Hastings Books, Music and Video went out of business, so we're down to just one video rental store left (Family Video) in a city of 100,000 people. In the 1990's we had at least a dozen or so video rental stores. Our mall no longer has any music stores or book stores; we're stuck with whatever is on the shelves at Walmart or Target. I expect even more retailers to go bust as long as this issue with sales tax continues to go un-addressed.
Amazon claims they want to add 100,000 jobs. What kind of jobs and where? For a company that is so huge on automation and has nothing in terms of retail store fronts I can't help but be suspicious that 100,000 jobs headline is bullshit. One thing is certain: I don't make my living designing signs for online companies. My business depends on companies that have a store front.
Philadelphia's soda tax is priced high enough that I can easily imagine people driving their SUVs out of town to load up on soft drinks, bottled water, etc. at some suburban grocery store not subject to the tax. The gasoline money would be more than offset by savings from dodging the high soda tax.
It appears to be ever more difficult to implement a clear, fair yet uncompromising tax system. Nothing in our way of life is free. Our streets, highways, water systems, sewage systems, garbage removal systems, police, fire departments, public schools, etc. all cost a lot of money to staff and maintain. We all have to pay for it with money. Waving a flag on the front porch doesn't pay any bills.
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Leo Enticknap
Film God
Posts: 7474
From: Loma Linda, CA
Registered: Jul 2000
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posted 01-13-2017 10:35 AM
My $0.02 on this is that the founding fathers simply didn't see online retailing coming, or anything like it, and therefore the interstate commerce provisions of the Constitution simply don't enable anything like a fair taxation system to be applied to business that is done by a combination of the Internet (which fundamentally doesn't even recognize national borders, let alone state, county or city ones) and freight shipping.
This is especially true if you have two adjoining states, one of which has a very high sales tax and the other none. Half of northern California makes short drives across the border into Oregon (zero sales tax) to buy small, portable, high value items, and that's completely legal.
IMHO this is a slightly different issue from sin taxation, which, theoretically at least, is not done just to raise revenue for the public purse. Sin taxation doesn't work on its own and never will: the public need convincing that an activity is actually sinful before any public acceptance of curtailing it is going to happen. With tobacco that took half a century: the first research that showed a clear link between tobacco and cancer was done by the Nazis in the late 1930s, but you didn't start to see smoking banned in many public places until the 1980s.
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