We noted earlier this year that Philadelphia’s tax on pop was taking down soft drink sales, and jobs and stores with it.
And it turns out that that’s true – pop sales are down by half in Philly.
But people are healthier – right?
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 traveling to get their soda at a reduced price.
Jazz Shaw did the math that I thought about, but didn’t, since Jazz did it…:
So, let’s look at this assuming one million ounces of soda was sold anually 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. (I was told there would be no math. Apparently City Hall in Philadelphia was operating on the same assumption.) Great job, guys. You gutted your revenue stream, caused layoffs in the beverage industry and depressed sales in the city’s retail outlets, likely impacting entry level jobs.
Of course, this is “unexpected” only if you haven’t followed similar stories from coast to coast, including here in Minnesota, where the rapacious and punitive increases to the cigarette tax enriched a lot of North Dakota, South Dakota and Wisconsin convenience stores a few years back.