Stossel: The Philly Soda Tax Scam

John Stossel fights with a Philadelphia City Councilman about the city's new soda tax.


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Want a soda? It costs a lot more in Philadelphia thanks to a new tax on artificially-sweetened beverages.

A 2-liter bottle of Coca-Cola that once cost $2 now goes for $3. Politicians and activists applauded when the bill was signed. They said the tax was needed to fund early childhood education.

But John Stossel points out that the tax has unintended consequences. It harms local businesses.

"It's a bad tax," Melvin Robinson, owner of Bruno's Pizza, told Stossel. His store is on the outer edge of Philadelphia, so his customers just cross the street to avoid paying the tax.

Philadelphia City Councilman William Greenlee defended the tax, saying "we're raising enough money to put 2,700 kids in Pre-K and to open 11 community schools."

The pizza parlor's customers didn't think their taxes were being well spent. "Preschool? I doubt that very much," one man told Stossel. "The Mayor says he is helping people," Stossel replied.
"He ain't helping me. He is tearing me up," the customer answered.

Another unintended consequence is that soda sales are down in Philadelphia, but liquor sales are up. When Stossel mentioned that to Greenlee he replied. "I don't know about that," laughing, "cause we have a liquor tax, too!"

Philadelphians already pay 44 taxes: including state income tax, sales tax, cigarette and alcohol taxes. "You should be rolling in money," Stossel told Councilman Greenlee. "But there's a lot to do out there, John," he responded. Yet a lot of the money goes to non-essential projects. The Office of Arts and Culture receives $4 million, to fund things like "Hip Hop Fundamentals."

"They're funding the arts," Stossel told Melvin, the pizza store owner. "What arts? People trying to live!" he replied.

Melvin has just one request for the politicians: "Stop stealing. That would be nice." Stossel doesn't think the politicians are stealing, but they do pay themselves three times Philadelphia's median wage, and pass bad laws like the soda tax.