Could the Philadelphia soda tax end up contributing to somebody’s death? After passing the nation’s newest tax on sugary beverages, the city is flirting dangerously with disaster, as Straight Line Logic reports. One would think that a tax designed to reduce the consumption of a superfluous and arguably deadly drink would have the effect of saving lives. Instead, a few years ago, just ninety minutes up the road in New York City, the nation watched in horror as a series of events set into motion by a similar nanny-state tax ended in tragedy.
The story of Eric Garner, now approaching its third year, is a tale of completely avoidable loss. Pinning the blame for his death on the New York Police Department, his own actions or the neighborhood he lived in is beyond the scope of this article. However, one fact is pertinent: the reason he was stopped by the police that day was that he was breaking the law. What law was he breaking? He was selling cigarettes on the black market — a market created solely by the outrageously high taxes on cigarettes within city limits.
Ridiculously high tolls on minor vices that apply only within city limits? Where have we seen that story recently? Will sidewalks in the rougher parts of Philly one day be filled with soda smugglers skirting the taxes of the nanny state? Impossible to know. The larger point has nothing to do with such speculations, but rather the concept of unintended consequences.
To a bureaucrat looking to make a difference, balance the budget, save the world, and be home in time for lunch, a soda tax looks brilliant on paper, as CBS News reported. The city estimated that the new tax would raise $91 million dollars this year, and earmarked the money to pay for pre-school slots and other programs. In addition to the revenue, the tax was also designed to reduce soft drink consumption, ultimately leading to a healthier population.
As Forbes found, however, the fallout from the tax was not what the city council expected. In its first month, the new levy caused nothing but pain. Beverage sales plummeted within the city. As opposed to harming the manufacturer, however, the decline in sales is causing some unexpected reactions. Distributors and grocery stores in Philadelphia have already announced layoffs due to the steep drop in revenue caused by shoppers leaving the city for their purchases.
It turns out that most people are smart and they want to keep money in their pocket. Instead of blaming himself, his staff, or the citizens of the city for the predicament they now find themselves in, the mayor laid the blame on the greed on the producers. Apparently, in his progressive mind, he thought the soda industry would happily slash their prices to accommodate the new tax, leaving the consumer paying the same amount as before. Since our economy is a capitalist one, those new fees instead sailed straight through the supply chain and into consumer’s wallets.
An overreaching government, even at the local level, can cause tremendous harm. The truck drivers, stockers, and cashiers who now find themselves unemployed are living proof of this action/reaction feedback loop. Politicians across the country would be wise to heed the warnings of Philadelphia and New York City. Even the most well-meaning laws can have terrible consequences as they change the society we inhabit.