Mayor Jim Kenney of Philadelphia has proposed a tax on sugar-sweetened beverages amounting to three cents per ounce for what would be the highest soda tax in the country in an effort to pay for universal prekindergarten.
The proposed tax could raise the price of a 20-ounce bottle of soda by 60 cents. Mayor Kenney, who previously sponsored similar legislation as a city councilman, is pitching the idea to Philadelphians as a way to raise $400 million over five years — enough money to fund renovations to local libraries and recreation centers, the municipal pension program, and universal preschool. Mayor Kenney was elected last year after promising to bring universal prekindergarten to Philadelphia.
Margot Sanger-Katz of The New York Times writes that the idea of a soda tax was introduced about a decade ago by public health researchers who were working to reduce levels of obesity and diabetes, especially in children. Naturally, researchers identified sugary soft drinks as a leading cause of poor health; they hoped that a tax on such beverages would discourage their consumption.
Soda tax proposals, however, have failed in New York State, San Francisco, and Philadelphia. These proposals have been bitterly fought by a soft drink industry worried about its profits and conservative activist groups that characterize the tax as another example of nanny-state excess. To date, the only American city to have passed a soda tax is Berkeley, California.
Interestingly, Mayor Kenney has deemphasized his proposal's public health benefits and instead has underscored the revenue it would generate to fund popular city projects. He has potentially altered the politics associated with the new "sin tax" similar to the one placed on alcohol and cigarettes. "I think Philadelphia may change the whole conversation about soda taxes," says Larry Tramutola, a political consultant who helped Berkeley pass its soda tax.
Other countries' approaches to sugary beverages serve as encouraging examples of the benefits communities have reaped from a Philadelphia-style tax on soda. Zeehan Aleem of BusinessInsider reports that after Mexico levied a tax on all sugar-sweetened beverages in 2014, soda consumption fell by 14% and precipitated a rise in the sale of bottled water. Great Britain's parliament, citing revenue benefits, is likely to pass a tax on soda this year after winning support from both the Conservative and Labour parties. South Africa is also considering a similar measure.
Unsurprisingly, the soft drink industry remains implacable in its opposition to taxes on its products. "Time and time again, voters in cities across the country say loud and clear they oppose soda taxes," says William Dermody, the vice president of policy for the American Beverage Association. The group spent over $9 million fighting Berkeley's soda tax, and it has promised to launch a social media campaign against the measure in Philadelphia. It calls the proposal a "grocery tax on the kind of drinks we buy for our family."
Katie Colaneri of NPR reports that even would-be sympathetic officials worry that the tax may fall heaviest on those it is designed to help: the poor. "It doesn't take a whole lot of analysis to determine where those sugary drinks are being sold," says Council President Darrell Clarke, who has yet to state his position on the proposal. "So the question is, is that fair?"
The Philadelphia city council will make its final decision on the mayor's proposal in June.