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Thread: Phillys soda tax isnt the windfall some had hoped for

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    Veteran Member bajisima's Avatar
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    Phillys soda tax isnt the windfall some had hoped for

    Appear that the poor pay the tax and the others shop elsewhere.

    Philadelphia's soda tax is falling flat — for the city, at least.

    The city started taxing sweetened drinks at 1.5 cents per ounce this year after a contentious debate. The tax was billed as a way to fund community schools, prekindergarten programs, recreation centers, libraries and parks. However, revenue expectations have fallen short every month since the tax took effect in January.

    Based on preliminary estimates, the tax generated $39.3 million in revenue through the end of June. That's about 15 percent short the city's original projection of $46 million, and just under its revised estimate of $39.7 million.


    A new study from market research firm Catalina found people in Philadelphia are still buying sugary drinks, but they're traveling outside city limits to stock up. The tax has seemed to encourage people to drink more water. Sales of bottled water within the city core have increased 13 percent, Catalina found. Inside the city lines, sales grew nearly 9 percent.

    The city expected distributors and retailers to recoup some of the "claimed losses" through such substitution, Dunn said. Still, businesses have condemned the tax. Groups like Ax The Bev Tax have been outspoken about their disdain for the tax and their efforts to get it repealed.

    https://www.cnbc.com/2017/08/22/phil...hoped-for.html

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    Any way we can isolate the price of a soda at a sportijg event venue for the Phillies, Eagles or Flyers? Before and after tax?

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    Veteran Member Dr Sampson Simpson's Avatar
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    You want a windfall of huge tax revenue and lots of jobs, legalize weed. Why the hell aren't all cash strapped states legalizing it
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    Thought Provocateur NightSwimmer's Avatar
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    Seems to me that if the tax had it's intended effect, then no taxes would be collected, since people would have been persuaded to stop drinking soda.

    Isn't that how sin taxes are supposed to work?
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    Scucca Æthelfrith's Avatar
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    Quote Originally Posted by NightSwimmer View Post
    Seems to me that if the tax had it's intended effect, then no taxes would be collected, since people would have been persuaded to stop drinking soda.

    Isn't that how sin taxes are supposed to work?
    Of course not, given price elasticity of demand. Its essentially internalisation of an externality, such that overconsumption falls. Of course its also highly regressive...

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    The Covfefe are Coming! BitterPill's Avatar
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    Quote Originally Posted by NightSwimmer View Post
    Seems to me that if the tax had it's intended effect, then no taxes would be collected, since people would have been persuaded to stop drinking soda.

    Isn't that how sin taxes are supposed to work?
    I think the intent was to raise money, yet people drinking more water instead of soda is an unintended benefit.

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    You just made the list! Macduff's Avatar
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    Quote Originally Posted by BitterPill View Post
    I think the intent was to raise money, yet people drinking more water instead of soda is an unintended benefit.
    I never understood the purpose of sin taxes. Are they supposed to raise taxes or discourage certain behavior. Because it's one or the other.
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    Scucca Æthelfrith's Avatar
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    Quote Originally Posted by Macduff View Post
    I never understood the purpose of sin taxes. Are they supposed to raise taxes or discourage certain behavior. Because it's one or the other.
    Reduce consumption. Raising tax is also important as, given they're regressive, taxes elsewhere have to fall to maintain progressivity

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    Veteran Member bmanmcfly's Avatar
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    Quote Originally Posted by Macduff View Post
    I never understood the purpose of sin taxes. Are they supposed to raise taxes or discourage certain behavior. Because it's one or the other.
    Ya, the purpose of sin taxes is to reduce the undesired behavior... Not smart to tie a tax that you don't want people to pay and mark it for schools...

    Unless this was one of those liberal policies that's famous for having opposite the intended effect.
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    The Covfefe are Coming! BitterPill's Avatar
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    Quote Originally Posted by Macduff View Post
    I never understood the purpose of sin taxes. Are they supposed to raise taxes or discourage certain behavior. Because it's one or the other.
    I guess a sin tax can do both, Philly is an example. While the purpose of the tax appears to be financial, it wasn't the expected windfall for the city, yet it still raised a substantial sum.

    Meanwhile, people appear to be drinking more water in Philly as a result of the tax, and that is good for everybody in the long run.

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