March 28 2016
Philadelphia Mayor Jim Kenney (D) recently proposed a 3-cent-per-ounce tax on sugar-sweetened bottled drinks and a 4.5-centper-ounce tax on fountain drinks bought within city limits. This will add 36 cents to the cost of a 12-ounce can of soda and 54 cents to a fountain drink of the same size. The Mayor claims this tax will reduce obesity rates and generate $400 million in revenue over five years. The Mayor plans to use this tax windfall to fund universal pre-kindergarten, new community schools, infrastructure projects, and the city’s pension fund.
Yet research on the efficacy of soda and other drink taxes suggests that they do little to reduce obesity or encourage people to make healthier choices. In fact, studies show that when soda is taxed, people simply substitute equally calorie-filled beverages that aren’t subject to the tax.
The Mayor touts this measure as a means to fund social programs, but ignores that this tax will primarily burden lower income individuals and will also hurt local businesses, as consumers take their business outside city limits to avoid the tax.
City officials can find better ways to fund programs and infrastructure projects, such as by cutting wasteful and duplicative spending. They should reject this wrong-headed, regressive new tax and trust individuals to make decisions about what to drink and eat without government interference.