Posted on 06/28/2016 12:16:32 PM PDT by Kaslin
In Philadelphia, a 1.5-cents-per-ounce tax on beverages goes into effect January 1, 2017. The regressive, highly unpopular tax will add 18 cents to the cost of a can of soda, $1.08 for a six-pack or $1.02 for a two-liter bottle. The new “soda tax” will be added on top of the already excessive 8% sales tax that applies to beverages in Pennsylvania.
Yes, the tax is unpopular – 58% of residents oppose the measure. Yes, the tax will disproportionately harm poor residents – economic studies show that low-income Americans spend a larger portion of their income on consumer goods like soda. No, the tax revenue—as the mayor promised—is not being reserved exclusively for an expanded pre-K program or city parks and recreational facilities. More than half the tax revenue will be used to plug the city’s deteriorating finances. No, the tax is not legal – experts are calling the tax unconstitutional.
Mayor Jim Kenney (D-Philadelphia) might have persuaded the City Council to support a “soda tax” with back-room deals and eleventh-hour concessions to individual council members. However, such sweet-deals and political horse-trading will be out-of-bounds in the judicial system. What will matter in the end is if the mayor’s legal team can persuade the courts that the grocery tax is legal under Pennsylvania law.
Ronald Castille, former Chief Justice of the Pennsylvania high court, has acknowledged that the “soda tax” is a de facto sales tax and preempted by the state. He wrote in Philly.com that the grocery tax is clearly a sales tax.
Many legal experts, including the former Chief Justice, have affirmed that the Philly tax violates Pennsylvania’s state Constitution. Specifically, Article VIII, Section 1 — or the Uniformity clause — which holds:
“All taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax, and shall be collected under general laws.”
Even before the City Council gave final approval to the grocery tax, Justice Castille, wrote in Philly.com that theMayor and Council were pushing an unconstitutional soda tax.
The tax is not only illegal, but it is also an economic disaster in the making.
The Kenney administration's finance director, Rob Dubow, has admitted the city expects stores to close because of lost revenue, and smaller grocery shops, convenience stores, and street vendors will be hit the hardest. The businesses that provide services in low-income communities, hire local residents, and pay a significant amount in taxes. These businesses will fail under the burden of Philly’s regressive, unpopular “soda tax”. When they go out of business, more Philadelphians will be without jobs, neighborhoods without stores, and a city government without a tax base.
It’s happened in other cities, like Baltimore, Maryland.
Walter Olson, a senior fellow at the Cato Institute, writes in Philly.com:
“Consider what happened in Baltimore, which enacted a bottle tax in 2010 (with the excuse, in part, of funding school repairs). Critics, including the National Federation of Independent Business and American Beverage Association, predicted that commerce in the city would be harmed, and that's exactly what happened. Painfully, the landmark 83-year-old Santoni's Supermarket in Highlandtown was among the losses. Owner Rob Santoni said the tax had caused an ‘irreversible’ decline in business as customers fled for suburban stores; beverage sales had slumped 28 percent and customer traffic 20 percent. Eighty workers would lose their jobs. ‘What has taken 83 years to build has been torn down by one person [the mayor] and one bad law,’ he told the Baltimore Sun.
More recently, Walmart closed its only Baltimore location, and local grocery chain Mars announced that it would close all its Baltimore stores.
Can you guess what's happened now? Right: Baltimore this winter offered huge one-off tax breaks to supermarkets willing to locate in the city to help solve what was said to be the public health crisis of ‘food deserts.’”
Philadelphia’s Mayor Kenney and the City Council are determined to see the tax implemented this January, and the Kenney administration will defend the “soda tax” in court. If the mayor wins, the city loses. Philadelphia will be burdened with a grocery tax that hurts the poor, causes businesses to close, and sends jobs fleeing. Philly will have its own, self-inflicted “health crisis of food deserts.” And for what? Not an expanded, universal pre-Kindergarten program, like the mayor promised, but to cover the gaping holes in the city’s ramshackle, bloated budget.
Philadelphia is a great city, and its people deserve better from Mayor Kenney and the City Council. “Let brotherly love endure” and let justice be served in the courts
Trump's fault.
Same reason I oppose LePage’s soda ban.
Politicians of the Left and Right need to stop micromanaging our lives.
We don’t need to be treated like children. My freedom to make bad choices is part of being American.
Didn’t they try this in NY?
How does Philly get away with their “city wage tax”?
This is a 3.5% (if I recall correctly) levied on anyone who works or lives within city limits.
Doesn’t this tax also violate the state’s preemption clause?
Not to support this tax in any way, but the supposed intent of the tax is meant to discourage consumption due to high prices. Thus, the “regressive” nature of the tax that is so “unfair”, is exactly what the architects designed.
Since when has that ever stopped them?
Obamacare rate hikes, soda tax in PA, gasoline tax in NJ...the real economy never recovered from 2008; this may well send us over the edge.
Mind you, if the actual intent of the tax is to impose a regularly recurring consumption based tax on those with a psychological addiction to soft drinks just to raise tax revenues, then they’ll readily achieve their purpose. Just like lottery tickets.
There is no one that can tell me what soda I can not drink. If I feel like drinking a certain soda, I will do so.
The Kennedys got rich bootlegging alcohol. Maybe a new generation of ‘statesmen’ can get their start bootlegging sodas.
Coca-Cola doesn't use Coca leaves for the flavor. http://www.naturalnews.com/032658_Coca-Cola_cocaine.html
“How does Philly get away with their “city wage tax”?
This is a 3.5% (if I recall correctly) levied on anyone who works or lives within city limits.
Doesn’t this tax also violate the state’s preemption clause?”
No, this is how Pennsylvania works. I don’t like it, and I’m leaving as soon as I can make a plan happen. Because PA is a nice place, but if you’re struggling with money then this place will finish you off.
Their DMV is setup to prevent anyone without $4000 in their pocket from ever driving. Their income tax is sly.
PA has a state income tax that’s pretty low. And lots of people may get tricked into moving here because of it. But then, from the shadows come a local income tax.
All of PA has 3% local tax from your income. Scranton, Philly, Pittsburgh have 5 or 7 percent tax.
So you pay federal, state and local. The nice thing about this is that this percentage of taxes stays in YOUR area. I live in the most expensive county in the state and half of what I was paying in CT in income taxes (state and local taxes equal what I paid in CT state taxes alone) go to my schools, my towns, and my municipality.
If you don’t pay these taxes the sheriff WILL be there, that year, to take your registered car. That’s why PA is so strict on registration - the state uses your registered property as leverage unceremoniously.
PA state has an extensive list of “Sheriff’s sales” where you can find nice homes for $2000. Well, the key is that the homeowner didn’t pay $2000 in taxes that year. So if you don’t pay these taxes, the town immediately seizes your stuff and tries to sell it. Of course, about 99% of these sales are just to get the attention of the land owner.
I grew up in CT, NJ, PA, NH and lived as a young adult in CO. None of these states are the states that I remember. They are all now enemy territory. Places where government have created systems designed to keep it’s people poor and non-threatening.
Hey , I got a warehouse just outside town ,No Tax
I live in East Goshen township, PA. My local taxes are 1%. My state taxes are 1%. Property taxes are about $5k a year for a good sized single family home on about 2 acres.
Though I work in a different township, and pay those local income taxes, they are actually routed back to my local township, so I only pay one local tax. 1% total.
But if I took a job in the city, I’d pay the city wage tax on top of local taxes. That’s why there are so many business parks just outside the city limits. I’m happy to let the city starve.
They use their caring and concern to justify their revenue streams. It's just for cover. The media helps them. Media, celebrities, and politicians all live in the same gated communities and they all think alike.
NJ’s new gas tax is also going to be very unpopular come this Friday. 23 cents per gallon. Sure hope that does not include heating fuel or I will be paying an extra 115 dollars just in taxes to fill up my tank for the winter.
Back in the 60s I worked at an auto plant in Ohio. There were always guys in the parking lot at shift change selling low tax cigarettes from Kentucky out of their car trunk. And that was when the price difference was in pennies.
I can see the same thing happening in Philly. Retailers will see their volume plunge and not just on sodas. People will buy all their other stuff where they can get the low tax soda.
They’ve got their hands in everyone’s pockets.
I avoid the city like the plague. I wouldn’t work there for any wage.
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