On January 1, Philadelphia instituted a new tax in an effort to discourage people to drink less soda and other sugary drinks as well as raise more “revenue.” The tax is exorbitant, to say the least. An extra 1.5 cents per OUNCE in beverage tax is being added to not only soda, but other things like Vitamin Water and Propel Energy Drinks. This is 24 times the amount of tax added to beer. To put it in perspective,
To put it in perspective, check this out.
The Tax Foundation recently discovered that a 12-pack of Propel energy drink costs $9.04 in one Philadelphia store thanks to a beverage tax of $3.04, while a 12-pack of Icehouse beer is $7.99 after the beer tax is applied. (That’s with a discount: the Propel normally sells for $6.99 in the store, meaning at regular price it would be $10.04 with the new tax applied, making the gap even wider.)
Author Scott Drenkard also pointed out that in some cases the beverage tax is nearly as much as the cost of the beverage, noting that a 12-pack of store-brand root beer retails for $2.99 and has imposed on it a new sugary tax of $2.16.
This is a perfect example of good intentions not making sense in reality. The city of Philadelphia, which is not showing the “Brotherly Love” with this ridiculous taxation, thinks it will raise $91 million in extra revenue. City officials say that half of it will go towards funding preschool. No doubt they also think that excess taxation will cause people to drink less soda or other “sugary” drinks. In this case, even diet soda is included in the “beverage tax” theft.
Do they really think people are going to pay that much for something to drink? It’s not like Philadelphia is on an island away from civilization. People will either purchase their soda outside the city (hello, Costco!)…or drink water. Of course, there’s also always beer or some other kind of alcoholic beverage, if the buyer is of drinking age.
Either way, I would venture to say that Philadelphia should not count on that $91 million they expect to raise. People may like their soda, but they aren’t chumps.