To improve the health of the citizens of Philadelphia they have been taxed on sugary drinks such as soda.
As mentioned by Hottier on Saturday, “Soda Tax” has in fact motivated the residents of Philadelphia to travel outside the city to buy their soda (and likely other goods), thereby reducing the revenue of the city. However, it did not increase the supply of healthier drinks in the city.
When the soda tax was first announced, workers at Pepsi took a hit. “With sales slumping because of the new Philadelphia sweetened beverage tax, Pepsi said Wednesday that it will lay off 80 to 100 workers at three distribution plants that serve the city,” philly.com reported in March of 2017.
The local outlet reported that the owner of Acme Markets, who has 16 stores in Philadelphia, had to cut employees’ hours because of the tax: “The beverage tax fell on about 4,000 items.
In Acme city stores, soda sales dropped as much as 80 per cent.Sales of other items covered by the tax, such as juices, creamers and energy drinks, were down 30 per cent, and the number of customers declined by 5 per cent. Philly stores cut an average of 150 to 200 employee hours per week, resulting in lighter paychecks for employees.
A CNN report on a study from medical journal stated: “While researchers found that sales of sugary beverages fell in Philadelphia after the tax, beverage sales in nearby towns and counties without the tax went up. That suggests people may have been travelling to get their soda at a reduced price.”
“People stopped buying their soda in the city (and almost undoubtedly a lot of other shopping list items) and decided to shop where prices were lower,” Hotair noted.
“Philadelphia did not see an increase in sales of un-taxed beverages such as bottled water,” CNN reported.
“The tax on soda increased by 17%, but the sales fell by 51%. So, let’s look at this assuming one million ounces of soda was sold annually before the tax went into effect. If sales had remained the same, the city would have realized $62,400.00 in revenue instead of $54,300.00. But with the volume cut in half, they managed to slash their revenue to $31,200.00.”
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