In the News
Philly.com Column - March 15, 2016
Byko: Soda tax explodes in Kenney's face
SOMEBODY SHOOK up the soda can and it exploded in Mayor Kenney's face.
On Saturday, the Inquirer reported a major flaw in the soda tax requested by Mayor Kenney: The tax on fountain drinks, which had never been mentioned, was 4.5 cents an ounce, 50 percent higher than the 3 cents-per-ounce tax he had been talking about. Ooops.
(Author's warning: Many numbers ahead.)
The soda tax was to pay for several desirable programs, such as universal prekindergarten and upgrading parks and rec centers, on Kenney's to-do list. Clearly, he gave those ideas a lot of thought.
Just as clearly, he didn't give much thought to the mechanism for paying for them - a regressive tax targeting a single industry that arguably will strike the poor the hardest.
A regressive tax from a progressive politician. We've heard that tune before.
Calling the tax "extortionate," it will be "imposed on the people universal pre-K is supposed to help, lower- and middle-class," John Longstreet, president and CEO of the Pennsylvania Restaurant Association, told me.
When it comes to Philadelphia budgetary innovation, you can count on creativity in dreaming up new things to tax. Remember the attempted lap dance tax?
The soda tax, pegged at 3 cents an ounce (plus the hidden 4.5 cents at the fountain), sits atop the existing 8 percent sales tax.
As a councilman, Kenney twice voted against the soda tax when proposed at 2 cents an ounce by Mayor Nutter. With Mixmaster Mike a fading memory, Kenney disinterred the already-rejected tax with a brilliant twist - let's make it 50 percent higher!
That's like a fast-food store admitting its cheeseburger is unhealthy and then adding a quarter-pound of bacon to fix it.
Does three cents an ounce sound like a lot? In my neighborhood grocery, I saw a 20-ounce bottle of Pepsi for $1.89. Add a 60-cent soda tax and the total is $2.49, a 31.7 percent increase.
A 67-ounce bottle of Coke was $1.99. Kenney's soda tax would add $2.01 to the price, bringing it to $4, more than doubling the cost. Does that sound small?
"Damn! You caught us," Kenney spokeswoman Hitt did not tell the Inquirer when the extra levy on fountain drinks was discovered. It was a mistake and would "very likely" be amended.
Kenney's out-of-whack proposal used Nutter's math. They cribbed Johnny's homework. Didn't anyone check it out?
"The legislation was reviewed thoroughly," said mayoral spokesman Mike Dunn. Just not thoroughly enough.
One difference: Nutter's tax was to be applied at the retail level. Kenney's is applied to the distributors, but they will have to pass all or most of it to consumers.
The tax is not only the highest ever in the nation, but "the mayor has not carefully considered the unintended consequences," such as losing other items people buy with soda, commented Dave McCorkle, president of the Pennsylvania Food Merchants Association, one of the groups Kenney likes to scold under the heading of "Big Soda."
Whenever anyone opposes something, they stick a "big" in front of it.
Big Soda. Big Pharma. Big Tobacco. Big Banks. Big Government. Big Labor. This might give Big Macs a complex.
"Big Soda showed they're willing to use any excuse to deprive Philadelphians of pre-K, community schools and investment in our parks, rec centers and libraries," Hitt told the Inquirer, as if Big Soda pays no city taxes now. (Hitt doesn't talk to me.)
Demonizing an opponent is a time-honored (and dishonorable) tactic, popularized by radical enthusiast Saul Alinsky. If you resist when the city singles you out for a tax, you are selfish, an unpatriotic ogre.
Kenney said that villainous Big Soda "charges our citizens, small businesses and distributors much, much more than what it costs for them to make the soda."
Will someone please explain capitalism to Mayor Kenney? Also, the word profit.
It is different with the city. Philadelphia spends more than it takes in and passes the bill along to taxpayers.
In his budget address, making it sound like a disease, Kenney said Big Soda hires lobbyists. (He neglected to mention that the mayor's office hires lobbyists.)
Kenney made a remarkable admission in the budget address: He was, in effect, brainwashed.
"The line that got me four years ago was the claim that this tax would hurt low-income, minority communities," Kenney said.
That is his Achilles' heel. Tell him someone is being oppressed - doesn't matter if it's true - and he signs up for active duty.
He now says he was snookered, that Big Soda victimizes people, you know, by making a profit.
The "facts" haven't changed, Kenney's mind has.
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