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Philadelphia Tax Makes Sugary Drinks More Expensive Than Beer

Image: Philadelphia Tax Makes Sugary Drinks More Expensive Than Beer
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By    |   Tuesday, 08 Aug 2017 08:21 AM

A tax on sugary drinks in Philadelphia has made those drinks more expensive in the city than beer, according to a Tax Foundation report.

The 1.5-cent per ounce excise tax is 24 times higher than the Pennsylvania tax rate on beer. "Purchases of beer are also now less expensive than nonalcoholic beverages subject to the tax in the city," according to the study.

The Tax Foundation noted that Philadelphia installed the tax as a means to raise revenue, not as a way to fight obesity.

The tax is also on diet soda, as a means to raise money for pre-kindergarten programs. However, less than half of the $39.4 million collected since the tax took effect Jan. 1 has gone to education, the study reported.

"In practice it awards just 49 percent of the soda tax revenues to local pre-K programs. Another 20 percent of the soda tax revenues fund government employee benefits or city programs, while the rest of the money will go towards parks, libraries, and community schools."

Drink maker PepsiCo announced a layoff of 100 workers and said a 43-percent decline in business as the result of the tax, according to The New York Post in March.

In April, Coca-Cola said the Philadelphia tax led to a 32-percent drop in Coke product sales in the city.

The $39.4 million is short of the $92 million that was anticipated for the tax, according to the study.

The report also said that soda taxes hurt low-income customers most. "Philadelphia's experience serves as a cautionary tale for other areas weighing similar beverage taxes."

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A tax on sugary drinks in Philadelphia has made those drinks more expensive in the city than beer, according to a Tax Foundation report.
US, philadelphia, tax, soda, expensive, beer
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2017-21-08
Tuesday, 08 Aug 2017 08:21 AM
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