More Liberal Run Cities Enact Soda Tax

One of my first few blog posts when I started this site was about the city of Baltimore and their soda tax. In an attempt to balance the city budget, the city council passed a two cents per container tax on beverages. Pepsi’s response was to shut down production at the Baltimore plant, putting 75 people out of work. Grocery stores reported sales were down because nearby counties did not have the tax. I learned today that the tax increased to five cents per container in 2013.

Early last year the city of Philadelphia passed something similar, imposing a 1.5 cent-per-ounce tax on sweetened and diet beverages. The tax is imposed at the distributor level but any moron can tell you costs are always passed on to the consumer. The tax amounts to a $1.44 increase on a six-pack of 16 ounce bottles.

In March last year, Pepsi cited the tax when announcing 80 to 100 workers would be laid off at a distribution center serving Philadelphia. 

So what effect did the tax have on Philadelphia businesses?

Philadelphia City Controller Alan Butkovitz conducted a survey that found nine out of ten businesses reported revenue loss. 

Burkovitz defended his survey in a story by WHYY.

WHYY – Even if the survey wouldn’t pass muster in an academic journal, Butkovitz said he believes it should serve as a bright-red warning sign.

“This is not going to be the comprehensive answer to everything, but I think it does create a serious warning and an attestation of what has been stated by a number of the businesses,” he said during a Monday news conference. “Because I think the administration has minimized and ridiculed the idea that businesses are fighting for survival.”

To that point, 40 percent of responding businesses said “they would have to make significant changes to keep the doors open.”

“The kind of businesses we’re talking about often survive on a 2 percent profit margin,” Butkovitz said. “That’s a big problem.”

And it’s a problem, Butkovitz believes, because grocery and corner stores will flee the poorest communities — leaving behind “food deserts” in their wake.

“It’s not just a question of the popularity of the tax,” he said. “What’s important to us is its impact on providing essential nutrition to people.”

Philadelphia’s independent grocers say the new tax is killing their businesses.

Billy Penn – So far — and it’s only been three months — local Philly grocery stores have said they’re struggling, describing losses in overall revenue of 10 to 15 percent compared to past years. While big chains like ACME, Family Dollar, Aldi and Walmart can absorb losses because of their national footprint, independent grocers are particularly vulnerable to shifts in revenue. These are places like ShopRite, Fresh Grocer, Shop-N-Bag, Bell’s, Chelten Market and others.

Many of them are located in lower-income areas where business is riskier in the first place and where the chains generally refuse to go. They are seen as anchors in their respective neighborhoods.

Nationally, these types of stores have been closing or getting bought out by chains, completely independent of any soda tax or bottle tax like in Baltimore. And now in Philadelphia, an unprecedented tax has been added to the mix.

“Most of these independent grocers are just on the borderline,” said John Stanton, professor of food marketing at St. Joseph’s University and a former marketing executive in the food industry. “They’re just making it. Small changes in revenue or cost are going to put them over the limit.”

And now another liberal-run city has decided to jump into the soda tax lunacy, with Seattle enacting a 1.75 cent an ounce tax on sugary drinks. The ordinance passed 7-1 last June and took effect on the first day of 2018. 

Check out these signs at a Seattle Costco.

And here is the most ridiculous part of this tax. The City of Seattle doesn’t expect consumers to be paying this tax

From the Seattle.gov Sweetened Beverage Tax information page:

The sweetened beverage tax is a tax on the distribution of sweetened beverages in the city of Seattle. The tax is collected on the final distribution of sweetened beverages by a distributor. The tax is not collected by the retailer nor is the tax burden intended to fall onto the consumer. The intent of the sweetened beverage tax is to tax the distributions of sweetened beverages into Seattle for retail sale in Seattle.

One of two things is happening here. Either the eggheads in the Seattle city government don’t have the first clue about business costs and how those are recouped or they are blatantly lying about not intending this tax to fall onto the consumer. 

In the city’s Sweetened Beverage Tax FAQ page they seem to be contradicting their own statement.

18. Can distributors increase their prices to retailers to pay for the tax?
The ordinance does not prohibit distributors from increasing prices; that is a private business decision. The ordinance does not prohibit a business from passing on the expense of this tax however the business deems appropriate.

Baltimore, Philadelphia and Seattle aren’t the only liberal-run cities to enact a soda tax. Berkeley, San Francisco, Oakland, Portland, Albany, Boulder and Cook County, Illinois have all done so as well.

All these soda taxes are passed under the guise of funding various liberal programs. When funding is needed, liberals will always find something to tax. 

But why stop at soda? Why not tax other “unhealthy” things that people consume? Where’s the tax on fast food, pizza, candy, chips, ice cream, etc? Oh, don’t you worry. Those will be next.

I’m waiting for the day when an American liberal proposes a tax on breathing. I say an American liberal because taxing breathing has already been done, sort of, in Venezuela.

The New York Times had an editorial around ten years ago that seemed to accidentally be making the case for taxing breathing.

Right now, everyone is using the atmosphere like a municipal dump, depositing carbon dioxide free. Start charging for the privilege and people will find smarter ways to do business. A carbon tax is one approach.

The writer was referring to coal plants, but I can easily see a liberal using the argument to propose taxing breathing. And apparently, I’m not the first to think so.

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