Minority leaders in Philadelphia speak up against the soda tax

As the Consumer Choice Center has been keen to point out in several articles and campaigns, additional taxes and levies on sugary drinks end up being regressive and hurting the very people they aim to help: minorities and the poor.

Now, minority leaders in Philadelphia, seeing the toll the taxes have had in their communities, are calling on the city to repeal them.

As reported in the Philadelphia Inquirer, black clergy leaders say the taxes are disproportionately hurting African Americans and the poor in the city.

“I don’t see how the tax, as it is constructed, can really effectively do what it is intending to do. We think it needs to be repealed and reconceptualized,” said the Rev. Jay Broadnax, president of the Black Clergy of Philadelphia and Vicinity.

Last year, Cook County, which includes Chicago, got rid of its unpopular 1-cent-an-ounce soda tax that its commissioners passed in November 2016 affecting 5.2 million residents.

The Philadelphia pastor said the 1.5-cent-an-ounce levy on sugary beverages, including diet soda, was having unintended consequences by saddling people of color, the poor and senior citizens with higher grocery bills, while dips in soda sales were hurting small neighborhood business owners.

“The way that it has worked out is that it seems to be hurting more than it’s helping,” Broadnax said.

When Philadelphia passed its soda tax in 2016, it was the largest U.S. city to implement such a fee. After the tax was implemented, shoppers chose to cross the city limits to purchase their sugary drinks, something we have also seen in places like Seattle and Chicago.

Former New York Mayor Michael Bloomberg, the architect of soda tax campaigns across the country, spent over $1.6 million in Philadelphia alone to help pass the tax. During that year, he also dropped $18 million in Oakland and San Francisco.

As I pointed out in my Washington Examiner article last year, Bloomberg is no doubt driven to do good. But whether soda taxes are the tool to help reduce obesity remains to be seen.

Though Bloomberg’s project represents a noble goal – reducing childhood and adult obesity – its actual impact is to make already low-income people poorer, and hasn’t yet produced any clear results on obesity.

In the case of Mexico, the largest jurisdiction which passed a tax on sugar-sweetened sodas in 2014, it’s quite clear that sales of sodas dropped as a result of the tax.

However, as Mexican researchers learned once they broke down the figures, low-income households paid a higher proportion of the soda taxes overall.

This likely means that soda taxes deterred higher-income individuals from buying and consuming soda, but not lower-income individuals: those who the government was originally trying to help. What’s more, it seems those who stopped purchasing sodas switched to alternatives with just as many calories, such as fruit juices or energy drinks.

That would mean the tax was at best a source of revenue for the national government, and at worst, a fierce killer of local shops and commerce.

An economic survey of the effect of the tax found that more than 30,000 Mexican stores which sold sodas were forced to close in the first half of 2016.

In Washington State, campaigners were successful in passing a ban on local grocery taxes. In large measure, this ban will ensure localities cannot pass their own taxes on ordinary goods Americans purchase at the store: meats, beverages, produce, dairy, grains, and more.

As such, Washington residents should be both proud and relieved. They won’t be seeing their grocery bills climbing any time soon, and that’s because they voted with their wallets on Election Day.

Whether policymakers at the city level will see the harmful effects of passing such taxes, however, remains to be seen. If they listen to the leaders in Philadelphia and other jurisdictions, they will think twice.

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About Yaël Ossowski

Yaël Ossowski is a journalist, activist, and writer. He's currently deputy director at the Consumer Choice Center, and senior development officer for Students For Liberty. He was previously a national investigative reporter and chief Spanish translator at Watchdog.org, and worked at newspapers and television stations across the country. He received a Master’s Degree in Philosophy, Politics, Economics (PPE) at the CEVRO Institute in Prague. Born in Québec and raised in the southern United States, he currently lives in Vienna, Austria.

U.S. Midterm Primer: What’s at stake for consumer choice?

The Consumer Choice Center doesn’t take positions on any specific political campaigns or elections, but there are at least some interesting state-level ballot proposals happening around the country that could overwhelmingly benefit consumer choice.

In the U.S. federal system, state residents are eligible to vote on certain popular initiatives and state constitutional amendments that will have a major impact on daily life for citizens and consumers.

CANNABIS

Michigan and North Dakota will both vote to legalize cannabis at the state level in separate ballot initiatives. Legalizing cannabis would be a boon to the economy and consumer choice, removing cannabis sales from the black market and allowing governments to both regulate and tax it safely and securely. That’s a huge win for consumers in those states. The same applies to medical cannabis on the ballot in Utah and Missouri. Allowing legitimate medical patients the ability to use cannabis to cure their ailments legally will help potentially thousands of consumers.

GROCERY TAXES

In Washington State and Oregon, there are separate ballot proposals that would prohibit local jurisdictions from imposing additional taxes on grocery items. That would favor all consumers, and help ensure that hard-working American families won’t be forced to pay higher prices for what they already consume, or be forced to shop across city and county lines in order to find the most affordable food. Because they’re regressive, grocery taxes end up hurting lower income houses the most. By capping local jurisdictions’ abilities to raise taxes on groceries across the board, the proposal would ensure Washington and Oregon consumers won’t be subject to discriminatory tax hikes at the local level.

If Seattle is any indication, which passed a city-wide soda tax last year, consumers would be cautious. The soda tax was intended to lower consumption of sugary beverages, but considering the city now estimates it’ll collect $6 million more in taxes than they anticipated, more people are actually buying sodas than before or the numbers are wrong. Data we have from Cook County, Philadelphia, and Mexico consistently shows that higher soda taxes push people to seek alternatives with even more sugar or to shop across state lines to get their sugary drinks. Soda tax measures are well-intentioned, but end up hurting the poor.

ENERGY AND VAPING

Similarly, California’s Prop 6 would require voter approval for all future vehicle tax and fuel fees, as well as cancel the 2017 fuel taxes enacted by the state legislature. Such a proposal ensures consumers have a voice on the fees tacked on for those who drive cars and rely on transportation.

A ballot proposal in Florida seeks to ban both offshore drilling and vaping indoors in the same proposition. The fact that these questions are coupled together is unfair to Florida’s citizens and consumers. Vaping is proven to be less harmful than smoking and shouldn’t be treated the same as tobacco.

NET NEUTRALITY AND INTERNET REGULATIONS

Not up for a vote but still very important issue are a number of states considering their own net neutrality Internat regulations. As we saw in California, state legislatures and executives are considering passing their own rules for Internet regulation. Allowing each and every state to impose their own Internet rules would burden consumers and harm innovation.

More than that, state-level Internet regulations will threaten the vast entrepreneurial and tech space that is growing across the country, and push companies to set up in jurisdictions that promise true Internet freedom rather than state-imposed regulation of content and delivery of Internet services.

FEDERAL ISSUES IN CONGRESSIONAL DISTRICTS

Along with state ballot proposals, the entire U.S. House will be up for election, as well as two-thirds of the U.S. Senate. Important issues on our radar include the future of fees and taxes imposed on the airline passengers, proposals to ban single-use plastics, self-driving car and truck regulations, national cannabis decriminalization, health care freedom, and many more.

Be sure to follow the Consumer Choice Center on social media, subscribe to our newsletter and join CCC as a member, and consider making a donation if you believe our work is important for lifestyle freedom, market access, and consumer choice.

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About Yaël Ossowski

Yaël Ossowski is a journalist, activist, and writer. He's currently deputy director at the Consumer Choice Center, and senior development officer for Students For Liberty. He was previously a national investigative reporter and chief Spanish translator at Watchdog.org, and worked at newspapers and television stations across the country. He received a Master’s Degree in Philosophy, Politics, Economics (PPE) at the CEVRO Institute in Prague. Born in Québec and raised in the southern United States, he currently lives in Vienna, Austria.