Soda Taxes

Philadelphia's New Soda Tax Has Nothing to Do With Obesity

The city council rejected regressive paternalism in favor of a simple money grab.


Coca-Cola Company, Amazon

Yesterday Philadelphia became the first major city in the United States to impose a special tax on soft drinks, but as enacted it has nothing to do with reducing obesity, the usual rationale for such levies. Unlike Berkeley, where voters approved a one-cent-per-ounce tax on sugar-sweetened drinks in 2014, Philadelphia will tax low-calorie and zero-calorie beverages at the same rate as regular soda. In fact, the tax of one-and-a-half cents per ounce could perversely encourage consumption of more calories, especially since it does not apply to juice products loaded with naturally occurring sugar.

Mayor Jim Kenney, who as a councilman vigorously opposed a two-cent-per-ounce soda tax proposed by his predecessor, Michael Nutter, because of the burden it would impose on poor people, changed his mind this year, pitching an even more burdensome three-cent-per-ounce tax. But instead of presenting the highly regressive levy as a "public health" measure aimed at discouraging poor people from drinking the beverages they prefer, which is how Nutter had framed it, Kenney said the city should use the tax to pay for "universal preschool." That strategy worked, except the city council noticed that Kenney planned to divert some of the money to the general fund, so it cut his proposed rate in half and broadened the base, applying the tax to artificially sweetened as well as sugar-sweetened drinks.

The upshot is that Diet Coke, with zero calories, will be taxed at the same rate as regular Coca-Cola, which has 12 calories per ounce, while orange juice, which has just as many calories per ounce, and grape juice, which has 21, will escape the tax altogether. Needless to say, this is not the way an obesity-fighting social engineer would have designed the tax, which is now simply a way for the city to raise money on the backs of poor and working-class residents. The money will be used to "help pad the City's General Fund" as well as "fund quality pre-K expansion, community schools, [and] reinvestment in parks and recreation centers." 

City Council President Darrell Clarke argues that the revised tax is less regressive than the one Kenney sought. "It is the view of many members of Council that a General Fund problem and citywide initiatives should not be resolved by a proposal that affects mostly low-income people with few options," he says, alluding to the fact that sugar-sweetened drinks are disproportionately popular among poor people. By taxing diet soda as well, the city council hopes to impose more of the burden on middle-class and wealthy residents. Councilwoman Jannie Blackwell says the enacted version of the tax will be "more widely spread among consumers at both ends of the income spectrum."

This increase in perceived fairness, of course, comes at the cost of obliterating the rationale for taxing these particular products. What was once a supposedly noble effort to save poor people from their own bad habits has become nothing more than a money grab. In a way, that's encouraging, because Philadelphians clearly rebelled at the notion that taxes should be used to manipulate people's dietary choices, especially when poor people of color are the main targets. The condescending paternalism of Nutter's tax proposal turned people off so much that he could not get it approved. Superficial similarities aside, it turns out that what passes for high-minded resistance to "Big Soda" in Berkeley looks a lot more like arrogant meddling in Philadelphia.