The bad taste of sugar tax

The Philadelphia story

Just in case you were thinking that a sugar tax might not be such a bad thing, the story of Philadelphia has come out, and it is worth reading. It makes it clear that the ramifications of such a move are considerably more far-reaching than expected, and it is important to know what might happen should such a tax ever be introduced here.

And, let’s face it, if we are to have no oil or gas, there is very little chance of us escaping a sugar tax because our government will need the revenue.

 

Philadelphia is the poorest large city in the United States, and it was the first major city to adopt a sugary drinks tax.

Here, where a quarter of the city’s 1.5 million residents live below the poverty line, there is a lot of need.

The drinks tax, charged to distributors at 1.5 cents-per-ounce, has tried to meet some of that need – funding 2000 much-needed slots for quality early childhood education (“pre-K”). But it’s been at the expense of “bread and butter” jobs in the beverage industry.

11 months after the tax kicked in, so far, 170 permanent industry positions have gone. Hiring has frozen and summer positions have dried up.

This is because drinks sales are down 45 per cent in the central city, but up 12-15 per cent on its untaxed fringes.

Well, that’s a no-brainer. Go and buy the stuff outside of the city centre, where the tax doesn’t apply.

Those who are hurt the most are the delivery drivers on commission. “Each location rises and falls on its own. The Coke plant here in Philadelphia – if they’re not making money, they’re going to shut it down.”

What a well-thought out move. Not only are distributors going to be affected, but the local drinks factory may end up closing as well.

Stores around the city’s borders face the most challenges, particularly when people can cross the street to an untaxed area and pay much less.

The saddest part is the risk that some of the most vulnerable families in the country might lose all that they gained in unionised jobs, healthy food access, economic development etc., caused by uninformed or reckless elected officials, advisers and researchers.

Nothing new there though, is there? Remember, this is soft drink we are talking about. Not alcohol, not tobacco, not marijuana, not methamphetamine. Soft drink.

And, get a load of this!

Philadelphia’s tax also applies to diet drinks, bucking the trend of other sugar taxes.

Sweetened milks and fruit juice are also included.

Exemptions are made for drinks that are at least 50 per cent cows’ milk, medical foods and baby formulas, and anything containing more than 50 per cent real fruit or vegetables.

But affected beverages account for more than 4000 grocery items.

“By adding the diet in, the effect of the tax became overwhelming.”

Well, thank goodness baby formula is exempt. I was beginning to wonder! So, what they have done is to try to discourage people from drinking sugary drinks and becoming overweight as a result. They also tax the diet versions of soft drinks, which contain no sugar and just about no calories.

Really?

I realise I am stupid but I always expected that diet drinks would be exempt. After all, most of the soft drink companies produce a large range of low (or no) sugar drinks, designed entirely for the consumer who wants to reduce their sugar intake.

Wouldn’t that make sense?

Actually, the whole thing is crackpot crazy. I really do understand a need to encourage people to look after themselves better, but this is not the way to do it. Most people who are trying to lose weight start drinking Diet Coke… oh wait… they are taxing that too!

Since 2009 there have been 40 attempts to introduce sugar taxes across US cities.

“It’s a cancer growing across the States right now.”

I would love to be able to say that it will never happen here, because our government are far too sensible, and they will work through all the detail of such legislation thoroughly to make sure we have ironed out all possible anomalies. I would love to say this, but I can’t. I genuinely fear that this stupidity could be repeated here because if anything is obvious in Philadelphia, the tax is not health driven. It is revenue driven.

We have a government that are splashing money around everywhere like it is going out of fashion and talking about cancelling or reducing revenues on valuable exports, such as oil and gas. Where do you think they are going to get the money from to continue their social programmes?

Take a guess…

-Stuff


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Accountant. Boring. Loves tax. Needs to get out more. Loves the environment, but hates the Greens. Has been called a dinosaur. Wears it with pride.

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