Philadelphia’s outlandish soda tax is what Democratic-party politics looks like when it lets its freak flag fly. So many classic elements are there: (failed) social engineering and “think of the children!” on one side, paid for with a punitive tax on poor people and destroyed businesses, which means destroyed jobs, which in turn means lives upended. What lives? Greedy capitalists with monocles, maybe? No, they’ll be fine. Think of ex-cons trying to regain their footing in society.
To review this debacle, in 2017 Philadelphia, seeking to fund a universal pre-K program, slapped mammoth sin taxes on Coke and Pepsi (and even Diet Coke and Diet Pepsi). Sweetened sodas (but not natural fruit juices) were hit with a huge tax of 1.5 cents per ounce, raising the price of a two-liter bottle of soda by roughly 67 percent. Philadelphia hoped to raise money and decrease obesity with one ingenious move. Who could have predicted what happened next?
The health benefits turned out to be nil. “The tax was ineffective at reducing consumption of unhealthy products,” reports a new study by Stephan Seiler of Stanford, Anna Tuchman of Northwestern, and Song Yao of the University of Minnesota. Poor Philadelphians were hardest hit by the tax because residents with the means to leave the city to make their soda purchases — the well-off — did so. A 42 percent decrease in soda sales within city limits was more than made up for by a large increase in soda sales in stores within two miles outside Philly. And the expected gusher of revenue didn’t quite materialize either, as receipts fell about 15 percent short of projections. “In summary, the tax does not lead to a shift in consumption towards healthier products, it affects low income households more severely, and it is limited in its ability to raise revenue,” the study said.
