Soda Taxes

Philadelphia Is America’s First Big City With a Soda Tax

Equal-opportunity drink tax.
Equal-opportunity drink tax. Photo: David McNew/Getty Images

No warm feelings today for sugary drinks in the City of Brotherly Love — the City Council approved the nation’s most sweeping soda tax in a 13-4 vote Thursday, making Philly the biggest U.S. city to stick it to Big Soda. Starting January 1, residents will pay an extra 1.5 cents per ounce when they buy sugary drinks. This obviously affects soda and everything else with added sugar, but it also extends to drinks that contain artificial sweeteners — a somewhat unexpected curveball the city threw in at the last minute. (Mayor Jim Kenney primarily pitched the tax as a massive untapped revenue stream, so including diet sodas maximizes the city’s money.)

The tax is a watershed moment for the anti-soda camp in America. Since 2009, elected officials in U.S. cities have taken about 40 stabs at passing soda taxes (two in Philly alone), and the only place one’s ever passed until now is in that bastion of progressive reform, Berkeley, California. Philly’s strategy to not harp on the public-health argument, but instead couch it as “a couple of pennies now; prekindergarten, libraries, and rec centers later,” could blaze a trail other large cities can follow.

Opponents — the loudest of which was, of course, Big Soda — argued the tax is regressive and would therefore penalize poorer residents disproportionately (the tax will be levied on distributors; if they pass it on to consumers, prices could go up by as much as 30 percent, which is a jump). The American Beverage Association billed it as “discriminatory and highly unpopular,” arguing in a statement that “The tax passed today is a regressive tax that unfairly singles out beverages, including low- and no-calorie choices.” The industry promises a lawsuit is on its way, maybe as early as this weekend; it predicts a soda “black market” will erupt once consumers refuse to pay the tax, possibly cratering sales by as much as 50 percent. Mayor Kenney argues that scenario seems rather fanciful: “Some people will do it out of anger initially, but I think out of convenience they’ll go back to shopping at their corner stores.”


Philly Is First Big U.S. City with a Soda Tax