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Philly Mayor Blames ‘Price Gouging’ for Outrage Generated by City’s New Soda Tax
Reason ^ | 11 Jan 2017 | Eric Boehm

Posted on 01/13/2017 12:39:16 PM PST by oblomov

After driving up the cost of soda and other sugary drinks with a new tax, the mayor of Philadelphia is now trying to blame businesses for charging higher prices (and for the outrage those prices have generated).

Mayor Jim Kenney, who proposed the soda tax and championed its passage through city council last year, told reporters on Tuesday it's not the new 1.5-cents-per-ounce tax that's making it more expensive to buy a can of Coke in Philly. No, according to the mayor, those higher prices are caused by city businesses price gouging their customers in order to stir up opposition to the tax.

"They're gouging their own customers," Kenney said, KYW News reports.

To understand Kenney's reasoning, you have to know that the new tax technically is applied at the wholesale level. That is, the city is charging a tax on the transaction that takes place when a business, like a sandwich shop or grocery store, purchases soda (or the syrup used to make soda in a fountain) from a distributor. In the mayor's mind, it seems, distributors and retailers are supposed to eat the cost of the tax and continue selling their products at the same price as before the tax went into effect.

In the real world, those sandwich shops and grocery stores, of course, are adjusting the retail price of sugary drinks to make up for the added cost imposed by the tax. Some of them have posted signs to inform customers why drink prices have skyrocketed.

Kenney doesn't like that. He called those efforts "wrong" and "misleading" and suggested that it could be an extension of the expensive fight put up by soda companies, retailers, and even the city's Teamsters Union in a failing effort to prevent the tax from passing in the first place.

(Excerpt) Read more at reason.com ...


TOPICS: Business/Economy; Editorial; News/Current Events; US: Pennsylvania
KEYWORDS: coke; democrats; pepsi; soda
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To: oblomov

Who is stupider than liberals?

Sheeple who listen to liberals and believe what they say without question.


21 posted on 01/13/2017 1:02:00 PM PST by samtheman (I voted for Trump without Russian help.)
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To: alternatives?
Don’t forget the sales tax applies to the increase.

ahh....you're right! A cute little multiplier effect achieved by making it a wholesale tax.

So let's say a $1.79 two liter bottle, + $1.02 in sugar tax = $2.81 x 7% sales tax = $3.01

a near-doubling of the retail price


22 posted on 01/13/2017 1:02:07 PM PST by Buckeye McFrog
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To: oblomov

What did this moron expect?


23 posted on 01/13/2017 1:03:18 PM PST by The Toll
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To: oblomov

Recall the idiot.


24 posted on 01/13/2017 1:04:49 PM PST by A CA Guy (God Bless America, God Bless and keep safe our fighting men and women.)
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To: oblomov

Listening to the Philly talk stations, they question if folks living near border areas will go outside of the city to purchase soda.. Thats it, thats the discussion. I’d say yes, they will buy the soda and every other item at stores outside the City, not just the darn soda. Save 1% sales tax to boot, I think it’s an added 1%?


25 posted on 01/13/2017 1:12:09 PM PST by WorksinKOP
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To: Buckeye McFrog

The expected the increase to be spread over the total purchase


26 posted on 01/13/2017 1:13:50 PM PST by TexasGator
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To: bankwalker
80% of the people are economic illiterates. That’s how we get these politicians.

100% of Democrats are economic illiterates.

That's how we get Democrat politicians in Democrat strongholds.

27 posted on 01/13/2017 1:17:05 PM PST by Flycatcher (God speaks to us, through the supernal lightness of birds, in a special type of poetry.)
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To: WorksinKOP

Uh-oh. How long until some enterprising Freddie Gray-type dies while selling “loosie” single cans of Pepsi and the city gets burned down?


28 posted on 01/13/2017 1:20:41 PM PST by philled (If this creature is not stopped it could make its way to Novosibirsk!)
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To: oblomov
the city is charging a tax on the transaction that takes place when a business . . . purchases soda (or the syrup used to make soda in a fountain) from a distributor.

"While concentrates or syrups are also taxed, their tax rate is based on the final beverage produced, not the raw syrup or concentrate."

29 posted on 01/13/2017 1:20:42 PM PST by FoxInSocks ("Hope is not a course of action." -- M. O'Neal, USMC)
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To: oblomov

If the city wants 0 cents more for a 20 oz soda and the retailer raises his shelf price by 25 cents, that is, of course, unconscionable price gouging.


30 posted on 01/13/2017 1:20:53 PM PST by arthurus
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To: oblomov

If the city wants 0 cents more for a 20 oz soda and the retailer raises his shelf price by 25 cents, that is, of course, unconscionable price gouging.


31 posted on 01/13/2017 1:20:57 PM PST by arthurus
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To: oblomov

So Mayor Kenney’s economics degree is from the University of Caracas?


32 posted on 01/13/2017 1:21:13 PM PST by Oldeconomybuyer (The problem with socialism is that you eventually run out of other people's money.)
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To: oblomov

In a market economy “price gouging” is a term with no meaning. It is relevant only to monopolies and cartels.


33 posted on 01/13/2017 1:22:24 PM PST by arthurus
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To: oblomov

“Sugary drinks”

Bloomberg invented that term like all leftists do when trying to shove their fascism down peoples throats. It’s freakin SODA. We don’t call ice cream “sugary cream”, we don’t call cookies “sugary dough”, we don’t call candy “sugary chocalate”.


34 posted on 01/13/2017 1:23:26 PM PST by GrandJediMasterYoda (Hillary Clinton IS a felon)
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To: oblomov

All business taxes are paid by the consumer of the businesses goods and services.


35 posted on 01/13/2017 1:24:46 PM PST by Mr. Douglas (Today is your life. What are you going to do with it?)
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To: WorksinKOP

Only two reasons why the meathead Democrats in Pittsburgh won’t try this:

1) Philadelphia is the only “first-class city” in Pennsylvania. So no other city’s home rule charter gives it that power.

2) 80% of Pittsburgh residents are less then five minutes drive from an adjoining jurisdiction.


36 posted on 01/13/2017 1:29:30 PM PST by Buckeye McFrog
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To: Buckeye McFrog

How many times have I told those on FR that businesses pay NO taxes!?!?

Here is a PERFECT example of a ‘business’ tax being paid by the final consumers.


37 posted on 01/13/2017 1:37:15 PM PST by Elsie (Heck is where people, who don't believe in Gosh, think they are not going...)
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To: alternatives?

“Don’t forget the sales tax applies to the increase.”

And according the article this tax on sugary drinks applies at the wholesale level. So one would reasonably expect to see this cost increase not only passed on, but also marked up to maintain profit margins.


38 posted on 01/13/2017 1:37:40 PM PST by -YYZ- (Strong like bull, smart like tractor.)
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To: Mr. Douglas

TADA!


39 posted on 01/13/2017 1:37:46 PM PST by Elsie (Heck is where people, who don't believe in Gosh, think they are not going...)
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To: Grimmy

Quite “Venezuelan”


40 posted on 01/13/2017 1:38:05 PM PST by Scrambler Bob (LOTS of /s)
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