Philadelphia is the latest American city to seek a tax on sugary soft drinks. We support Mayor Jim Kenney’s proposal, which will have benefits beyond discouraging excessive consumption of the “liquid candy” embedded in the American diet.
Advocates see the 3-cents-per-ounce tax raising $432 million over five years – designated for universal pre-K school programs. That’s a winning combination.
The fiscal ills of the Philadelphia city schools are well-known and, while this funding won’t solve its problems, any effort to improve the early education of city kids is a boost.
As the Philadelphia Inquirer’s reporting detailed, the mighty empires of Coca-Cola and PepsiCo are fighting the proposal with every drop of their lobbying resolve.
The corporations’ marketing wizardry over decades has turned what could be a benign, occasional sweet bubbly treat into a semi-addictive substance that represents an exciting lifestyle choice.
Moreover, the multinational corporations have reduced their overall tax burden by playing countries off each other. Coca-Cola has shifted plants and earnings to low-tax nations and shopped around for breaks, reducing its overall taxes from 36 percent in the late 1990s to 25 percent today.
Well practiced at tax battles, the soda companies will try to kill this one, as they did in New York City and San Francisco.
It’s no wonder they’re running scared: Many Americans are wising up to the perils of pop. Total sales and profits are down. Both Coca-Cola and PepsiCo have rolled out beverages with less sugar and in smaller portions, though it’s tricky to promote items that argue against your core products.
Britain is about to pass a progressive tax on sugary drinks that may serve as an example: The higher the sugar content, the higher the tax.
Producers and consumers alike will be motivated to switch to modestly sweetened teas and fizzy beverages.
As with any “sin tax,” the danger is that a taxing body gets hooked on the revenue from the bad stuff and doesn’t want it to go away.
Nevertheless, Philadelphia’s mayor should be encouraged in his pursuit of this tax with multiple benefits.