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Philadelphia Tribune - May 11, 2016

Beverage tax will trickle down to hit the poor

Mayor Jim Kenney has proposed a 3-cents-per-ounce tax on sugar-sweetened juices and drinks as a revenue source to fund pre-kindergarten. Is this a beverage tax or a corporate tax? Whatever label is put on it, it will further strain the ability of our most vulnerable citizens to simply put food on the table.

There is no doubt that this is a regressive tax and it’s going to fall hardest on low-income families. These are concerns that have been raised in City Council during recent budget hearings.

Concerned Philadelphians on all sides of this issue have eloquently made their cases for and against the proposal in the ongoing budget hearings and community meetings. Certainly no one is against pre-K, or renovating the parks, libraries and recreation centers, but the beverage industry is a major contributor to the local economy and shouldn’t have to foot the entire bill.

Between the bottlers and distributors, 1,233 employees support their families. Do we want to put these jobs at risk?

Will the children of these unemployed workers benefit from pre-Kindergarten?

The overall problem is that we need a reliable and sustainable revenue source that doesn’t punish families and business owners in order to accomplish these goals. In the past five years, Philadelphia’s families have seen their [natural] gas rates go up, four property tax increases and will most likely see an increase in their water rates this year. This proposed tax just adds to the list of expenses for already struggling families.

Two other aspects to this debate have gotten lost in recent days.

One is the reiteration that this is a tax on distributors — not retailers or consumers. The mayor’s administration is assuming these businesses will either absorb the tax — a big assumption — or spread it out over many different items. But, as it’s been pointed out in numerous City Council hearings, this is a false sense of reality to think that distributors would just absorb this tax, which, in some cases, doubles the cost of their product. I guess they could, but would soon be out of business in Philadelphia.

It will, without question, be passed on to retailers and their customers.

The second is once distributors and retailers cross county lines to restock – and they will — how would this tax be enforced? Are we potentially looking at a new city department just for this, or expanding an existing department? Either way, more money will be siphoned off from the city budget to cover those beverage tax enforcement agents.

In the past, the government has stopped short of imposing hurdles to one’s ability to pick up traditional items at the grocery store. After all, Philadelphians are already paying one of the highest sales tax rates in the commonwealth. Now we’re being told to use the revenue to better educate children.

I ask Philadelphians who are for the grocery tax to consider this: What will government tax next when revenue is needed for a new initiative? What new program requiring sustainable revenue will be put on the table and which product or service will have a higher tax on it?

Because believe it, there will be a next time. Which industry will be next? Maybe they’ll charge Philadelphians a separate tax to have their trash collected.

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