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Huge soda tax crippling businesses in Philadelphia

By Ed Zadylak 3 min read

Quenching one’s thirst in the City Of Brotherly Love just got a whole lot more expensive.

As of Jan. 1 of this year, customers who purchase certain soft drinks will pay more because of legislation that was passed by city council in June of 2016. The Philadelphia Soda Tax will add 1.5 cents per ounce tax on sugar added and artificially sweetened soft drinks. It will also tax energy and sports drinks and fruit and vegetable juices that are less than 50 percent fruit juice. Because of the tax a 12 ounce can will have 18 cents added to its cost. $1.08 will be added to a six-pack and $1.02 added to a 2 liter bottle.

A 24-pack or case of your favorite soda will increase by $4.32. Money collected from this tax will be used to fund pre-kindergarten programs community schools parks and recreation and add to the city’s general fund. It is estimated that the new soda tax will bring in $91 million every year.

The tax is levied on distributors who have passed it on to retailers who in turn pass it on to their customers. The soda industry did lobby to defeat the tax but their efforts failed. The mayor of Philadelphia who supported the tax stated, “I did not think it was possible for the soda industry to be any greedier.” Look into the mirror mayor, and you will see greed.

For every action there is a reaction. In the first two months of this year supermarkets and distributors are reporting a drop in sales of 30 to 50 percent. Are employee layoffs in those businesses likely to occur? You decide.

While on the subject of taxes let us look at wine and spirits. The Johnstown Flood Tax is still added to every bottle of alcohol purchased in Pennsylvania. The tax was enacted to rebuild the city of Johnstown after the flood. The city by 1942 had sufficient funds to do so yet the tax is still being collected. Seventy years later the hidden tax adds 18 percent to the cost of purchasing alcohol. The tax is not listed on the sales receipt but is included in the purchase price.

The only tax the customer is aware of is the state sales tax. Think about it. When we purchase wine and spirits we are taxing a tax! Online one can view the Pennsylvania Liquor Control Board’s website. Go to reports for 2015-16. The Johnstown Flood Tax is now listed as the State Liquor Tax. At 18 percent the tax brought in $$348 million last year. That is for just one year!

There are some elected officials in this state who firmly believe that a tax of any kind is the answer to solving any problem that may arise. Not so! The answer is simple and works every time. It is called a turnstile.

Ed Zadylak is a resident of Connellsville.

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