Taxing Sugar: Noble or Nanny State?
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Incentive Taxation

Taxing Sugar: Noble or Nanny State?


For anybody who doesn't live or work in Philadelphia Pennsylvania, it's nearly impossible to describe the anger and confusion generated by a bitter argument over whether pre-K, rec centers, and public pensions should be paid for by a tax on sugar sweetened soft drinks (SSD if you want to talk the nifty jargonese of academia).  

The administration of Mayor Jim Kenney once to impose a $.03 an ounce tax on SSDs for the stated purpose of raising enough revenue (about $94 million a year) to fund pre-K and the other mentioned programs. City Council is not so sure, and have proposed either a compromise, or an alternate tax on rigid containers.  


Again, this is not about public health but revenue. Except, when it is about public health. Many mixed messages have been sent out, along with intervention by such worthies as Hillary Clinton, Bernie Sanders, former New York City Mayor Michael Bloomberg, and some Harvard professors.

Obviously there are many dogs in this hunt.  All of this angst is bewildering, because we're talking about $94 million a year in a city and school district where direct taxation raises $4.2 billion annually (give or take a few millions).

Therefore, Philadelphia is fighting over a new tax with uncertain revenue, and unforeseen consequences to add just about .25 of 1% to the city's coffers.

CSE/UrbanTools starts with several assumptions about taxation. One of those assumptions and convictions is that a particular tax should be as broad as possible, particularly on the community created value of land.

A tax on SSDs is going to be deployed as an excise tax. Excise taxes are a particularly pernicious form of tax as they are easily passed on down the economic chain to final consumers. For an SSD, the final consumer is likely to be low income, young or minority.  


Is there justification for pre-K programs? Yes.
Is there reason to be concerned about consumption of SSDs? Yes.
Is that a reason burden the poorest among us to pay for a program to help the poorest among us? You answer.



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