Philadelphia Proposes New Sugary Drink Tax

The City of Philadelphia has proposed a new tax on soda and other sugary drinks.

Philadelphia’s new Mayor Jim Kenney proposed the 3 cent-per-ounce tax on sugary drinks, in an effort to boost funding for public projects like universal pre-K and community schools, park and library renovations.
Philadelphia has the highest poverty rate of any of America’s largest cities, at 26 percent. Kenney believes that the tax will generate more than $400 million over the next five years, and that large soda manufacturers can handle the tax increase.

"What we're looking to do is to take some of that profit, to put it back into the neighborhoods that have been their biggest customers, to improve the lives and opportunities for the people who live there,” Kenney said at a rally promoting the tax.

The proposed tax would likely increase the price of sugary drinks and soda, which would encourage consumers to cut down on the amount of sugary drinks they are consuming, which would help curb obesity and diabetes. However, the local Teamsters Union is concerned about the effect the lower demand would have on industry jobs.

The sweetened beverages which would be taxed would include soda, sports drinks, flavored waters, presweetened coffee or teas, and fruit drinks that are not 100 percent juice. The tax would not apply to baby formula, diet drinks, milk-based products or unsweetened drinks that can be sweetened at the point of sale.

The proposed tax may seem like a hustle, but the idea has been around for years and can be found in many countries throughout the world, with varying amounts of success. Other governments have imposed taxes on junk foods, salt and soda in the name of public health.

For example, junk food is the more expensive choice in vending machines and cafeterias at Hospitals across England, despite it normally being the cheaper option. Japan even has a “fat tax” which fines employers if their overweight employees fail to take part in dietary counseling.

The Navajo Nation imposed a tax within the United States on junk food, adding 2 percent to the cost of foods which have minimal or no nutritional value. This would include chips, soda and fried food. At the same time, the Nation dropped the 5 percent sales tax on fresh fruit and vegetables, to encourage healthier living.

The difference in the case of Philadelphia, is the reason for the tax. Kenney aims to take the extra tax money and put it into public works and services that are often underfunded and have a positive influence on a community. He firmly believes that these things will remain underfunded or will not get funded at all if this tax is not passed.

“There is simply nowhere else to find this revenue,” said Kenney.

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