A beer drinker’s take on Philly’s new soda tax

Now soda slurpers know how the rest of us feel.

And by the rest of us, I mean beer drinkers – adults who enjoy grown-up beverages. Beverages, by the way, that are taxed way more than the city’s newly imposed penny-and-a-half surcharge that Mountain Dew addicts are griping about.

A quick primer:

If you drink one 16-ounce Coca-Cola – or Gatorade, Monster, Starbucks Double Shot or…the list of sweetened crap is endless – per day, it’ll cost you an additional $87.60 a year under Philadelphia’s new beverage tax. By comparison, if you drink one 16-ounce glass Coors Light (or something better) per day, it costs you an additional $182.50 under Philadelphia’s liquor tax – a tax beer drinkers have been paying for more than 20 years.

And that doesn’t include federal and state excise taxes, or the additional price that retailers charge to recoup the cost of their liquor licenses. The Beer Institute, which lobbies lawmakers on behalf of breweries, claims about 40 percent of the cost of beer is taxes.

So, why do we pay so much for a cold one?

Because, as much as you may venerate the glory of malt and hops, alcohol consumption is still generally treated by the government as a vice. And in America, we tax the hell out of vices. So-called sin taxes are levied on goods that can cause harm, to repay their social damage and to tamp down their consumption through higher prices.

According to the Association of American Physicians, annual healthcare expenditures for excessive alcohol consumption are $22.5 billion a year. But guess what: Obesity, some of it brought on by those Big Gulps, costs more than 10 times that much – more than $315 billion a year in health care expenses, according to a study at Cornell University.

Whether these taxes have any impact on consumption is questionable. The evidence shows it was the enactment of tougher drunk driving laws, not higher prices, that drove down alcohol intake. As for soda, I suspect sugar addicts won’t give up their daily fix as long as they can easily stock up on the other side of City Avenue.

But let’s not get bogged down with a debate over social engineering through the tax code, because that’s not the primary benefit cited by proponents of these taxes. Both were enacted ostensibly to fund childhood education.

Which is damn worthwhile.

But education benefits everyone, and its cost shouldn’t be borne inordinately by those who happen to enjoy soda or beer. If the schools or pre-K programs need more money, the city (and the state) ought to be funding them more fairly through wage or real estate taxes. Unfortunately, that’s a non-starter in a city trying to attract new residents and businesses.

So, here’s another way to look at it:

That $182.50 a year you pay in Philadelphia drink taxes is a drop in the bucket in a city that spends $2.8 billion for its public schools. Consider it your civic duty. If it’s a make-or-break number for you, cut out just one drink a week – that will more than pay for the cost of these annoying taxes.

As for you soda drinkers, well, take it from this beer drinker: Suck it up.

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Comments

  1. Jack  January 11, 2017

    The worst thing about this tax and the gas tax in NJ is they misled people for the real use of the money raised. They are smart enough to frame the taxes for things no one could be against– pre school funding, road repair, old ladies safely crossing the street. Then the shell game starts and you find out the money goes to other places not as savory.

  2. George Hummel  January 11, 2017

    So much has been wrapped with “it’s for the CHILDREN! SO WHAT’S YOUR PROBLEM??”

    • don@joesixpack.net  January 11, 2017

      Agreed… The only thing that’s never worked for is gun control.

      • George Hummel  January 11, 2017

        It would be interesting to track the life of that 10% drink tax dollar!

  3. Tom  January 11, 2017

    The other obvious point missing is when consumers either consume less or buy their soda outside the city limits the tax revenues will be lower than expected. Therefore the city will need to raises taxes to offset the lower than expected tax revenue.

    • George Hummel  January 11, 2017

      True. It would only hold water (soda?) if statewide.