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Free Minds & Free Markets

Philadelphia’s Soda Tax Is a Bad Idea Other Cities Will Copy

Despite promises from activists and lawmakers, it won't help low-income consumers.

SodasChristian De Grandmaison / Dreamstime.comEarlier this month, Philadelphia adopted a penny-and-a-half-per-ounce soda tax. The revenue from the tax will be used in large part to expand pre-kindergarten opportunities—a potentially dubious pursuit. A critic might note that spending tens of millions of dollars to expand pre-K in a city where even the most optimistic reports show city schools already fail to educate children and are routinely broke may not be the best idea.

Philadelphia's soda tax isn't the nation's first—that dishonor belongs to Berkeley—and it likely won't be the last. That's because such taxes, once touted as an evidence-free way to reduce obesity, are now seen by cash-strapped cities as a fix-all for their often self-imposed budgetary woes. Soda taxes won't just reduce obesity rates, advocates claim, but also fill city coffers.

Despite the shift from rhetoric about soda taxes as an anti-obesity tool to soda taxes as a revenue-raising mechanism, the public-health crowd, which openly detests soda—New York University Prof. Marion Nestle's book Soda Politics: Taking on Big Soda (and Winning), published last fall, paints the soda industry as "the enemy," while former Bloomberg administration health commissioner Thomas Farley, the brains behind New York City's short-lived soda ban and the current Philadelphia health department head, has called soda "weaponize[d]"—is still on board (and behind) soda taxes.

Farley's old boss, former New York City mayor Michael Bloomberg, for example, a leading opponent of both soda and food freedom, in a statement sent to me and others after Philadelphia's tax became law, said he'll "continue working to ensure that cities and nations pursuing these anti-obesity strategies get the support they need to level the playing field with the soda industry."

Indeed, activists like Bloomberg are also funding efforts to place soda tax initiatives on ballots in a dozen other U.S. cities later this year, including San Francisco, which already voted down a tax. These funding efforts in Philadelphia drew criticism. Philadelphia magazine lamented the influence of "dark money" from Bloomberg and others to bankroll a group supporting the tax. 

In addition to activist support, some legal academics also praise soda taxes. Recently, for example, two tax law faculty argued that such taxes aren't regressive if they help pay for things that benefit low-income Americans.

But who do such taxes really benefit—if anyone?

What negative impact will Philadelphia's soda tax have on employment at groceries and convenience stores, and on their suppliers? Won't the soda tax increase alcohol consumption, since six-pack of soda will now cost about the same as a six-pack of beer? Won't higher-income Philadelphians simply drive outside the city (or even the state) to buy soda at places like Costco (meaning the tax burden will likely be borne more by low-income consumers)? What if families pay more for soda and as a result can afford to buy fewer fruits and vegetables?

Consider, too, that there is little or no evidence that soda taxes reduce obesity. Soda accounts for about five percent of the calories Americans consume. Recent research suggests soda taxes may cut that already small consumption rate by about 10 percent. Even if we don't replace soda calories with calories from candy, pizza, beer, or cookies—though research suggests we will—then soda taxes will eliminate 10 calories a day from our diet, or about one pound per year. In other words, soda taxes won't make anyone thinner.

Even absent taxes, reducing soda consumption hasn't dented America's obesity problem. Soda consumption has fallen in the United States by 25 percent since the 1990s. But data suggests Americans are as obese as ever. That means people drank far less soda even as obesity rates continued to rise.

At least one key effort to boost revenue to improve the well being of low-income Americans hasn't worked—and is as regressive as any policy in existence.

"State lotteries were supposed to provide money and resources to public schools and, in turn, to improve educational outcomes," I noted in a Playboy column last year. "But educational achievement has stagnated in recent decades. And lotteries have served as little more than a tax on the low-income Americans who buy the bulk of the tickets."

It's troubling that soda tax supporters are unable to demonstrate that soda taxes may improve health outcomes. Using soda taxes as a tool to fund other policy initiatives that purportedly benefit low-income consumers is also destined to fail when those policies themselves aren't proven to be effective. Policy decisions like these that are driven by a mix of campaign promises (as in Philadelphia) and passion simply invite future food-policy interventions that are set up to fail.

Prof. Nestle has referred to soda as "low-hanging fruit." Who's to say other fruits higher up on the tree branch won't be the next targets for those who want to tax our food? Activists recently seized on a World Health Organization report that links consumption of bacon, beef, and other meats to cancer.

Today's soda tax could turn into sin taxes on hamburgers and bacon. It could evolve into taxes on foods that are high in carbs. If organic food is somehow better than cheaper competitors, governments may choose to tax non-organic foods.

Where, if anywhere, does this stop? Unfortunately, not in Philadelphia.

Photo Credit: Christian De Grandmaison / Dreamstime.com

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  • Get To Da Chippah||

    Where, if anywhere, does this stop?

    It stops when nobody is drinking soda, or using an ever-expanding list of 'tobacco products,' or adding salt to anything, and every is consuming a government-approved portion of daily nutri-gruel and washing it down with no more than the "correct" amount of distilled water, as prescribed by the FDA. Of course, we'll need taxes on water and nutri-gruel to counteract the money stolen from the government by people buying their sodas, 'tobacco products,' and salt on the black markets created by onerous tax-and-regulate schemes.

  • Jerryskids||

    "Daily" nutri-gruel? Look at Fat Bastard over here, thinks he needs to eat every single day!

  • Get To Da Chippah||

    I apologize. What with the cost of non-GMO, organically grown, locally sourced, grass fed materials, the union-negotiated wages of the producers, the Gruel Safety inspectors and their supervisors, and the Oversight Administration Bureau's involvement to make sure the Gruel Safety Inspector Supervisors are supervising properly, nutri-gruel is just too expensive to be doled out on a daily basis.

  • Swiss Servator||

    YOU LEFT OUT "FAIR TRADE" AND "RAINFOREST ALLIANCE CERTIFIED" - WRECKER! KULAK!

  • Adans smith||

    My orphans live well on gruel 3 times a week.It stunts their growth so their easy to control when they mature.As a bonus they take up far less space in the yard shack at night.

  • kevrob||

    You don't use Free Range Orphans, scratching the yard for naturally sourced protein, such as grubs, worms and other crawlies? Cad. Providing a "shack" may be defensible if there are orphan rustlers about, but don't you find they thrive better when exposed to the elements for the short period between shifts? Perhaps you have a plentiful local supply, so your orphans are essentially disposable?

  • C. S. P. Schofield||

    So, how many obscenity and animal abuse laws does she have to violate an hour?

  • Fist of Etiquette||

    A critic might note that spending tens of millions of dollars to expand pre-K in a city where even the most optimistic reports show city schools already fail to educate children and are routinely broke may not be the best idea.

    That's exactly where it's needed. You have to throw more money at your failing system until it fails no more. I mean, what else can you do?

    And how does soda add fat to you? IT'S LIQUID.

  • Adans smith||

    Why to you hate children Fist?

  • How You Like Me Now?||

    One cheer--and two "Bronx Cheers"--to the sweetened beverages tax. The tax was originally written to be levied at $0.03 an ounce for sugary beverages. When the powerful councilmen, who represent Philly's poorest and Blackest neighborhoods, objected that this unfairly exempted the disproportionately White and relatively wealthy consumers of Diet beverages, its target was changed from "sugary" to "sweetened" beverages while the per-ounce rate was mercifully halved.

    So where does my one lonely libertarian cheer come from? First, I'm in favor of any tax which is not simply a projectile against the well-off. If we are ever to incrementally get to the point where there is a cross-income-group against taxes, then the poor will have to bear some of the cost of government so they don't see it as simply "free money." Second, anyone with a car (on average wealthier people) will be able to avoid it by stocking up when they're in the suburbs.

    [cont'd]

  • How You Like Me Now?||

    [cont'd]

    Finally, I don't think Pre-K is the worst possible use of municipal funds. Why? In an impoverished city like Philadelphia, many, MANY of these kids have ineffably shitty parents. (Why did I even use the "s?" A lot of these are shitty single moms who have never even been close to a wedding altar but just squeeze out their kids and leave them to grow feral and terrorize the streets.) The city could actually conceivably be a less shitty "parent" than the actual biological parent. Pre-K education is just daycare, a little children's prison. Maybe I'm naïve but I think the kids could be half-way decently socialized in those "classrooms" before they get too big to control at about age 12 or so. IOW, I don't trust the state (city) to teach the kids science, math, English, or History but maybe if they were handling three year olds they could successfully teach them to STFU.

    What bugs me about the way this actual debate went down--I had a front row seat--is that there was a fucking two-card monte going on here: it's about health; no, it's about revenue! Whenever you complained one goal wouldn't be met, they'd answer you with the other argument.

    TL;DR - Anything is better than the city's wage tax. This is just funding a free daycare for kids before their trip to the municipal school-to-prison pipeline. Even if the project doesn't work, it's less implausible than a million other things the city tries and fails to do.

  • Rhywun||

    You are naive if you think there's some sort of "day-care lockbox". Most lottery money doesn't go to education as promised. The same will happen here.

  • How You Like Me Now?||

    This is a good point. I wish we could make some sort of amendment to the city charter that mandated that for every new responsibility government undertakes, it must renounce responsibility for something of a similar cost. #Libertopia

  • C. S. P. Schofield||

    I'm beginning to favor an idea I flirted with in the early days of my political awareness; a hunting season on elected officials and government functionaries above a certain level. Tags would be costly, and the hunted would be allowed to shoot back.

    Sort of like the execrable "PURGE" movies, but more focused.

  • C. S. P. Schofield||

    Which brings me to my basic argument against most new government projects;

    "I want to wait to see how you do, these next few years, at repairing the roads, re-painting the crosswalks, and replacing the plastic trash cans that melted so nicely. When you have a handle on simple stuff like that, then we can talk about something complicated like education or social engineering."

  • Paper Wasp||

    This justification doesn't make sense.

    MANY of these kids have ineffably shitty parents...who...just squeeze out their kids and leave them to grow feral...

    If this is the root cause of why public funding for daycares must be bloated by a tax levied on a consumable has nothing to do with childrearing and daycares, then fix the root cause instead of taxing to pay for the results. Cut or eliminate welfare subsidies just for grunting out kids. The kids have shitty parents because the parents choose to have kids just to get free shit. There's no incentive to be responsible for their own fertility. Create an incentive by ending the free-shit gravy train.

    The city could actually conceivably be a less shitty "parent" than the actual biological parent.

    Philadelphia, along with every other major U.S. city, has had Head Start for decades. Parents also have state and federal daycare subsidies. If state-paid daycare and Head Start hasn't solved the problem of feral kids in the more than 50 years of its existence--if, in fact, the problem is getting worse--how is throwing more money at it going to make it effective?

    Maybe I'm naïve but I think the kids could be half-way decently socialized in those "classrooms" before they get too big to control at about age 12 or so.

    Again, if it hasn't worked in the last 50 years, throwing more money at it won't help.

  • Fist of Etiquette||

    Oh, yeah, I almost forgot. Philadelphia is populated completely and solely with a-holes. They deserve what they do to themselves.

  • Adans smith||

    Nuke it from space,just to be sure.

  • Rockabilly||

    Even Rocky?

  • How You Like Me Now?||

    I used to be President of the Fist of Etiquette Fan Club. Now I am going to repress this truth almost as assiduously as I hide my flamboyant homosexuality.

  • Fist of Etiquette||

    It's a lifetime appointment. BOTH of them are.

  • Rhywun||

    But who do such taxes really benefit—if anyone?

    A rhetorical question, I assume.

  • Rational Exuberance||

    They don't understand. They wonder why people don't just drink lattes, champagne, and Perrier water, like normal people do! Qu'ils boivent du Champagne!

  • Akira||

    No, no, no... HERE'S how you solve the obesity epidemic: elect Bernie Sanders. That way, people will have to stand in government breadlines for hours to get even a small portion of food. Everyone will become meager and healthy on their government-approved rations. Voila - no more obesity!

  • Rockabilly||

    It's working in Venezuela

  • C. S. P. Schofield||

    I want to know how "Obesity" can be an epidemic.I mean, the word means "a widespread occurrence of an infectious disease in a community at a particular time.". Do the idiots who (try to) rule us think fat is communicable?

  • NoVaNick||

    Epidemic=any behavior the elites disapprove of. This is a code word necessary to get funded and they actually apply the same analysis to obesity, smoking, and porn viewing that they do to infectious disease transmission. About 40 years ago, most infectious diseases were thought to have been eradicated so the public health field turned its attention to behaviors to ensure its continued relevance. I was friends with some public health grad students several years back and these people are sooo far to the left in their political views, they make Bernie look like Ayn Rand.They also have the sanctamoniousness of bible thumpers-a winning combination.

  • Paper Wasp||

    Right? The nannies are always shaking their fingers at the foods you can buy at a 7-Eleven, and the unwashed poors who buy them. With the other hand, they're holding bags of grease they pick up from trendy hipster wankholes like Blue Star Donuts or Paseo. If hipsters eat there, it can plug up your aorta before you're done chewing it, but it still gets a pass.

  • Glide||

    No worse than the "heroin epidemic".

  • XM||

    In real life, most people don't hog sodas from big gulp cups like comic book guy from the Simpsons or other hipsters from movies. But that's the sort of perception fed by popular entertainment, and that's literally all that's needed for the ruling class to act.

    I don't understand what taxes like this are meant to achieve. If people buy tons of sodas and raise money for whatever project the soda tax was intended to fund, then you failed the original objective. Philly would have traded an obesity epidemic for pre K program.

    If the soda tax discourages soda consumption then that's bad news for small business and the soda industry. Coca cola has plants in the south.

  • Rhywun||

    It's meant to pad the coffers - that is all. The tax will be tweaked until it achieves maximum effect on the treasury regardless of whatever lies its supporters come up with.

  • Deep Lurker||

    If only that were true.

    If we're going to have a given tax at all, it ought to be limited to raising revenue and not aimed at altering people's behavior. Unfortunately, the incentive politicians face is not to maximize revenue from a tax, but to maximize the drug-like 'high' they get from exercising power over others via the tax.

  • C. S. P. Schofield||

    I have seen it. Admittedly, this was below the Mason-Dixon line and during the summer months. There's something about 90 degrees and 90% humidity that summons up a thirst.

  • DaveH||

    Potentially dubious? Gimme a break! You're starting to sound as mealy-mouthed as ... well, those to whom I never listen, I guess.

  • buybuydandavis||

    Progressivism - screwing the peasants for their own good.

  • NoVaNick||

    As in most major Northeast cities, the revenue promised by the soda tax will go to paying the fat pensions promised by the unions to municipal employees.

    The proggies love to tax products they disapprove of to help the children, until now this has mostly been tobacco but curiously they are now turning to soda. Guess they realize its harder to sell loosies of Fanta than it is of Newports.

  • NoVaNick||

    Philly is a strange place. I used to enjoy hanging out there 10-15 years ago but now it has become overrun with self-righteous assholes who I guess couldn't cut it in NYC.

  • kevrob||

    Let's get this straight. The lottery is not a tax. Nobody makes you buy a ticket. The state having a legal monopoly on that kind of gambling sucks, but participation is voluntary. I'd legalize competing lottos, starting with deregulating charity raffles so they could give folks like me a play the state keeps it snout out of.

  • Allstarlizard||

    This article doesn't do anything to convince me that a soda tax is a bad thing. Many of the points are just absurd. So, poor people won't be able to purchase fruits and vegetables because of the higher cost of soda??? How about they just don't buy the soda at all because the fruits and vegetables are the better choice to begin with? Nobody is forcing them to buy the soda. Why would wealthier people travel outside the city to save a few cents buying soda? That's an idiotic point! They would waste more money in gas and time getting there then they would save. As for the obesity point, 1 pound per person per year sounds like a significant number to me. That amounts to millions of pounds of body fat per year!

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