Tag Archives: Soda tax

Soda Tax Fizzles In Chicago As Cook County Officials Cast Decisive 15-1 Repeal Vote, by Tyler Durden

There’s a difference between levying a tax and projecting what you’re going to get from it, and actually collecting what you projected. The projections for Cook County’s soda tax didn’t quite pan out after soda sales crashed. From Tyler Durden at zerohedge.com:

In a shocking move that completely upends Chicago’s endless pursuit of higher taxes and an overly-regulated nanny state, the Cook County Finance Committee took the unprecedented step of voting to actually repeal their unpopular ‘soda tax’ last night.  The 15-1 vote followed an outcry from local residents and small business retailers who say their soda sales crashed 90% after the original ban was passed.  Per ABC:

 The vote to repeal the sweetened beverage tax was one spawned by revolt from people and business owners across the county, many who packed the board meeting Tuesday afternoon.

“I’m about 10 percent of where my soda sales used to be. It’s really hurt me deeply in the pocket and my workers also. I’m very happy you are understanding this and going to repeal this tax,” said Ken Blum, a blind vendor.

“I believe what we heard over the last ten and eleven months is that our residents are fed up, and they finally said enough. Tax fatigue has sunk in,” said Cook County Board Commissioner Sean Morrison.

“I have heard from the people in my district overwhelmingly, the business owners, the retailers, as well union members in this building who are opposed to this tax,” said Commissioner John Daley.

“Let me tell you I’m overjoyed and elated that this tax is going to go away. I mean the people in my district by an overwhelming majority don’t want this tax,” said Commissioner Richard Boykin.

The repeal of the tax still faces a vote from the full board which is expected later today.  That said, the repeal will not take effect until December 1, which is when the new budget is set to go into effect.

To continue reading: Soda Tax Fizzles In Chicago As Cook County Officials Cast Decisive 15-1 Repeal Vote

 

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Philadelphia Soda Tax Leads To 30-50% Plunge In Sales, Mass Layoffs, by Tyler Durden

For we anti-statists, this is a truly heartwarming story. From Tyler Durden at zerohedge.com:

When Philadelphia became the first US city to pass a soda tax last summer, city officials were eagerly looking forward to the surplus-tax funded windfall to plug gaping budget deficits (and, since this is Philadelphia, the occasional embezzlement scheme). Then, one month ago, after the tax went into effect on January 1st we showed the tax applied in practice: a receipt for a 10 pack of flavored water carried a 51% beverage tax. And since PA has a sales tax of 6% and Philly already charges another 2%, the total sales tax was 8%. In other words, a purchase which until last year came to $6.47 had overnight become $9.75.

What happened next? Precisely what most expected would happen: full blown sticker shock, and a collapse in purchases.

According to Philly.com reports, two months into the city’s sweetened-beverage tax, supermarkets and distributors are reporting a 30% to 50% drop in beverage sales and – adding insult to injury – are now planning for layoffs.

One of the city’s largest distributors told the Philadelphia website it would cut 20% of its workforce in March, and an owner of six ShopRite stores in Philadelphia says he expects to shed 300 workers this spring. “People are seeing sales decline larger than anything they’ve seen up to this point in the city,” said Alex Baloga, vice president of external relations at the Pennsylvania Food Merchants Association.

Since all of this is taking place as previewed in a recent post: “The ‘Soda Police’ Just Learned A Valuable Lesson About Taxes”, we doubt it would come as a surprise to anyone, although we are confident that Philadelphia city workers will be amazed by these unexpected developments.

Sure enough, in response instead of admitting the tax was a bad decision, the city lashed out by launching the latest “fake news” campaign, when it questioned the legitimacy of the early figures and predicted that customers responding to the initial sticker shock by shopping outside the city would return. “We have no way of knowing if their sales figures and predicted job losses are anything more than fear-mongering to prevent this from happening in other cities,” said city spokesman Mike Dunn.

To continue reading: Philadelphia Soda Tax Leads To 30-50% Plunge In Sales, Mass Layoffs