In Philadelphia, Astroturfed Soda Tax Outrage Campaign Continues into Its Third Year
It’s been three years since Philadelphia’s Beverage Tax was signed into law by Mayor Jim Kenney, and the contentious bill remains a prominent issue across the city. Signs in some restaurants/delis blame the tax for price increases, the reliably regressive philly.com brain-geniuses continue to pump out op-eds against the tax, and now that election season is upon us, a new television campaign urges voters to demand that Kenney repeal the tax.
What you won’t get from all of this noise is any left perspective on this tax, the programs it funds, and the implications of the way it is structured. I will do exactly this, but first, a quick refresher course.
First of all, despite what you might have heard, the soda tax is not technically a tax on consumers (don’t fret — I’ll get back to this dubious claim a bit later). According to the law, the responsibility to pay the tax falls on the distributors of the implicated beverages — 1.5 cents per ounce. The money collected from this tax is being put into a few different city programs, including numerous urban renewal projects (parks, playgrounds, etc.), but most significantly PHLpreK.
PHLpreK provides education to thousands of 3–4 year olds across Philly, and while it isn’t technically “universal,” access to the program does not discriminate based on income (which means that it won’t have the problem that many means-tested programs have suffered from wherein there is a whole class of people who don’t qualify but also cannot pay out of pocket for the service themselves).
Now, let me say that while the majority of this column will speak about my criticisms of the beverage tax, if it were put up to a public vote (lol, not likely) I would vote in favor of the tax, as is. In particular, I appreciate the transparency surrounding where the money is going, and the necessity of expanding early childhood education is incredibly important, certainly more so that people’s freedom to drink cheap sugar water. Study after study has demonstrated how PreK sets up children for success later on, and while I recognize that the biggest impediment to educational equality will continue to be poverty, if wealthy parents can afford to send their children to PreK, then everyone else should have that opportunity as well.
Before we get into my critiques, I’d like to quickly mention that from my perspective, all of the talk about how the policy is anti-consumer choice, or more government nanny state, or will devastate businesses, is more of the same dull claptrap from the usual suspects. They say the same crap about every attempt of government to find new revenue and expand social services, and I’m not interested in giving these tired arguments any more play. Instead, I would like to give some space to what I have identified, from a left perspective, are problems with the policy as well as the philosophy which undergirds the tax.
- It unfairly targets the poor.
Any flat tax, no matter how minor, will unfairly target the poor. This is the case with sales taxes, and much the same with the beverage tax. Because any tax which doesn’t take into account personal income/ wealth will inevitably represent a larger percentage of a poor person’s income than a wealthy person’s (if you have more money, you should pay more tax — both amount and percentage — that’s a straightforward position which should be considered before making any changes to the tax code). The result is that while the soda tax does raise much-needed funds for revitalization projects and universal PreK, it disproportionally targets poor people to raise these funds (you might recall that America’s dad, Bernie Sanders, actually opposed the soda tax for this exact reason — before later having to fight the soda companies who were twisting his words).
And I know that the city will claim over and over again that the tax isn’t technically a sales tax, but if there isn’t any mechanism in the bill to actively stop the distributors from simply passing the tax on — and in fact, part of the point is to dissuade people from buying soda — then you can’t really argue in good faith that it doesn’t act exactly like a sales tax from the perspective of the consumer (how else is a tax on distributors supposed to decrease consumption if it doesn’t increase the price for consumers?).
Here’s the other thing to remember: the tax makes people less likely to purchase a beverage which is known to be bad for them, but this, again, only applies to poor people. If you’re wealthy, 1.5 cents per ounce isn’t going to make you flinch, nor reconsider purchasing a soda (though, based on what I’ve read over the past few years, you’ll still complain a whole lot). The implication here is that we have to manage the health of poor people (no doubt because many of them are un or underinsured and thus a drag on the health system) more closely than wealthier people.
In fact, it’s a damn sight worse than that, because any tax of this kind, whether it be soda or cigarettes is premised upon the idea that a significant portion of the population will be so impoverished at any given moment that a few dollars per pack or a few cents per ounce would provide enough financial dissuasion to make them potentially give up an addiction or drink La Croix instead. In a moral society without inequality, in which everyone was cared for and no one desperately poor, these taxes would be ineffective at accomplishing their stated public health goals.
This outrage campaign is the autoimmune response of an industry which by and large is used to getting what it wants, flying under the radar, and avoiding regulation.
2. It doesn’t go far enough.
Personally, I would have spent more time with the regulatory aspects of the bill, specifically by banning branding, advertising, and putting big-ass warning labels on soda bottles. When Australia enacted plain packaging for cigarettes, the Mars corporation joined the coalition of cigarette manufacturers who opposed the rule specifically on the grounds that a similar law might one day apply to their candy and soft drinks as well. If they’re thinking about it, so should we.
I think the general uninterestedness with this regulatory process more or less confirms that the tax was primarily meant to raise funds without having to increase something like the wage tax (or god forbid taxes on businesses and their profits) which Kenney’s administration figured would be more likely to draw the public’s ire (Kenney basically says as much in this interview). I think what Kenney and other supporters weren’t able to anticipate (because their liberal naivete led them to believe that corporations might be capable of swallowing a bitter pill if it means acting in the best interest of the many) was the overwhelming response and targeted campaign designed to kill the program that continues to this very day.
Let’s not be naive. The reason this issue won't go away isn’t because there’s significant genuine grassroots outrage. It’s the autoimmune response of an industry which by and large is used to getting what it wants, flying under the radar, and avoiding regulation. The campaign to kill the beverage tax is astroturfed, funded quite clearly by the soda companies themselves and the associations they create in concert with one another to manage the phony displays of “free market competition” which satisfy regulators. An industry which has this kind of surplus money to spend on such a large campaign is its own argument in favor of increasing corporate taxes and democratizing these industries. We cannot continue to leave them alone with this kind of capital — it’s dangerous.
Soda companies don’t care about you or your health or your “consumer choices.” As far as they are concerned, your life is worth exactly the dollar amount they expect your lifetime of soda purchases collectively add up to, and not a penny more (for a cigarette company this works out to around $10,000; I’d guess it’s less for soda companies). Furthermore, if they were primarily concerned with the destruction to local businesses which would result from decreased soda sales, they could at any time simply absorb the tax themselves which the structure of the bill quite clearly allows for.
If we acquiesce to these demands and get rid of the tax, these companies will simply pivot back to using their power and capital to lower corporate taxes across the board, taxes which directly contributed to this current surplus that they are now bandying around as an alternative payment mechanism.
But of course they won’t do this, because despite what some of their propaganda has said, soda companies and distributors also don’t care about small businesses (and why would they? A sale is a sale, it doesn’t matter who the middleman is — and if small businesses went under and convenience stores were more consolidated, it would probably just simplify the process of distribution and benefit them in the long run anyway).
The anti-tax propaganda campaigns won’t make any mention of my criticisms because the companies underwriting them don’t care about poor people and certainly don’t want to open the door to any future regulation. They are only interested in the most basic, bad faith, self-serving arguments which carry well in a few words or phrases — stylish slogans which use the same Bernays-ian tricks which they use in the production of their dangerous products (did you know the sound a soda can makes when you open it — the metal pop, not the gas escaping — is actually meticulously engineered to elicit a salivating response in people over time — to make you want to open a soda too, if you’re nearby). Soda companies hire engineers specifically to maximize the addictiveness of their products and then hire public relations specialists to deny this practice relentlessly.
One of the ads I’ve been seeing a lot recently which is paid for by this campaign suggests that we should “ax the tax.” But the propagandists were smart enough to anticipate that people would be hesitant to give up any social program like PHLpreK so they suggest that we should use Philadelphia’s budget surplus to fund the program instead of the beverage tax. Let’s be real, if we acquiesce to these demands and get rid of the tax, these companies will simply pivot back to using their power and capital to lower corporate taxes across the board, taxes which directly contributed to this current surplus that they are now bandying around as an alternative payment mechanism.
If you’re upset about the soda tax then don’t complain to City Council. Blame Harrisburg, and blame DC because the state and federal governments have continuously failed to properly support local municipalities, failed to secure basic government services like upkeep for public parks and universal pre-k, and failed to maintain public health in any meaningful sense which would prevent a tax on soda from becoming necessary. If there were a statewide or federal universal pre-k program, there would have been no need to implement the soda tax.
There is one final complication I would like to comment on before wrapping up. It has been widely reported (CBS, NBC, ABC, WHYY) that a ShopRite store has been forced to close its doors because of the beverage tax. Philly.com goes as far as to say “we’re heartbroken” which is a pretty ridiculous thing to say about a business, frankly.
Here’s the thing: this story is false. The source of the claim that the soda tax is to blame for the store closing was the owner of the store that was closing. I am not a journalism major but I think that is commonly known as an unreliable source.
In order to buy into this narrative, you’d first have to believe that a significant amount of a grocery store’s revenue (not a convenience store, a full-size grocery store) could be soda. And then, on top of this, you’d have to believe that the regulatory effects of the soda tax were so great that it would result in such a decrease in sales that it could jeopardize that business. These are both ridiculous claims. Some of the stories mention these things, but not in the title which is all many people ever see.
If you check the comments under the social media posts that correspond to these articles (a thing I would normally not advise, especially for local outlets which usually attract the absolute worst discourse) you will see over and over people correcting the story themselves — doing what was once called journalism — and informing the news outlets that the truth is that the store being written about was absolutely filthy and no one from the area wanted to shop there. You could say that this was a consumer choice then, a perfectly normal function of the glorious free market that these people claim they love — consumers registered their disgust with the conditions of the store with their wallet, the store didn’t respond, and eventually had to close.
So, while the beverage tax is an imperfect policy which mostly fails to target the centers of corporate power which loom over Philadelphia politics, Kenney’s continued resistance to these interests shows that despite his initial naivete, he really is interested in doing the right thing here. He isn’t going to allow his administration to be completely bulldozed like what happened in Seattle (Philly’s obscene HQ2 bid, notwithstanding).
If the tax is axed, to borrow their phrasing, it will be a loss for Philadelphia. Hundreds of people are now employed to teach PreK to thousands of students and this tax is the sole reason that is the case. This is the end of the argument. If you suggest otherwise, you’re either incredibly entitled (thinking that thousands of kids don’t deserve PreK if it means saving a few cents) or are being tricked by pro-corporate propaganda. Don’t let them distract you from who the real bad guys are, namely, the corporations who would rather spend thousands on tv and facebook ads than pay a nominal distribution tax.