Back in June, Mayor Jim Kenney signed into law a city-wide tax on soda. Kenney claimed that it would promote public health all while funding a program to expand the city’s pre-k system, seemingly indifferent to the economic impact that it would have on Philadelphia residents and businesses.
The tax comes in the form of a 1.5 cent increase per every ounce of soda. The tax has increased the price of a 12-pack of soda by $2.16, directly affecting low and middle income families. Unsurprisingly, Philadelphia residents are by-passing their local stores in order to avoid the onerous tax, causing revenue to flow out of the city. Soda sales in the city have dropped between 30 to 50 percent since the tax has taken effect less than two months ago. This loss in revenue has many local retailers looking to cut the size of their workforce.
Brown’s Super Store, one of Philadelphia’s largest distributors of soda products is likely to cut around 20 percent of its employees due to the sharp decrease in profits. Some businesses have reported a drop in sales as large as 50 percent. This tax has single-handedly hurt middle class families, business incentive, and job creation.
In a Bloomberg interview, Jeff Brown, CEO of Brown Super Stores said, “I would describe the impact as nothing less than devastating.”
Regardless of the clear economic distress that has been caused, Mayor Kenney is still under the illusion that the tax has been beneficial for the city. Kenney blamed the upcoming job cuts on retailers for not merely absorbing the added costs. During an interview with Philly.com, he stated, “I didn’t think it was possible for the soda industry to be any greedier.” Philadelphia’s out-of-touch mayor clearly has no conception of the most basic fundamentals of economics. Businesses actually need to make money in order to sell products and create jobs.
Yet, Mayor Kenney is proud of the $5.7 million that has been funneled into the city off the back of the soda tax. He continues to be unconcerned with the obvious toll this tax has already taken on retailers and Philadelphians alike. This is hardly the economic boost for the city that Kenney claimed it would be considering the massive job loss and burden it’s placed on families. The Philly soda tax fiasco is a sign of things to come if other cities make the mistake of using this as a model.