Pennsylvania’s most progressive tax–May 13, 2016

Soda_Tax_Heals

Pennsylvania’s most progressive tax

There’s no doubt the agenda behind Philadelphia’s proposed soda tax is progressive. Funding the expansion of 6,500 pre-k spots for children in the greatest need, much-needed repairs and renovations for rec centers, parks and libraries, the establishment of 25 community schools—these are the seeds of transformation for a city seeking greater student success, safe spaces for kids and economic prosperity.

The means to fund this agenda is a 3 cents per oz. corporate tax on distributors of sugary drinks, which frothing Big Soda claims will be regressive. A study of Mexico’s soda tax published in the British Medical Journal reveals the claim of regressivity falls flat. In fact, a soda tax could very well be Pennsylvania’s most equitable.

According to the study, overall sales of sugary drinks in Mexico decreased by 12% after one year of the new tax. But the decrease in sales from low-income consumers was more than 17% while there was a minimal change for those in higher income brackets.

Mexico’s soda tax proposal was met with charges of overburdening poor people, as it has in Philadelphia. But the actual numbers tell a different story: the nation’s wealthiest consumers pay more while the poorest, who continue to buy the drinks, simply buy less of them. Over the same time, sales of untaxed beverages (mostly bottled water) increased 4%.

Pennsylvania’s inherently regressive tax structure is enshrined in its Constitution. The Institute of Taxation and Economic Growth ranks Pennsylvania sixth worst state in terms of regressive tax policy, especially its high sales tax.

Sales taxes are regressive because they treat all consumers the same. In Pennsylvania, for instance, a sales tax of 6% on most goods are leveled equally whether you make $20,000 a year or $1 million, taking a greater proportion of a lower earner’s income. But as opposed to actual regressive taxes like the ones on tobacco and alcohol, the marketplace is full of alternatives for those who choose not to pay the tax. For example, while distributors would be taxed on sugary fruit drinks, 100% fruit juice has no added sugar and would be exempt from the corporate tax.

Progressive solutions paid for by a progressive tax.


advocate and serveAre you among the majority of Philadelphians who support the corporate tax on sugary drinks?
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hashtag seriously“Instead of $60 million a year to pay for 6,500 new seats over five years as Kenney wants, the Clarke proposal would raise $19 million a year toward 2,000 new seats,” reports the Inquirer of Council President Darrell Clarke’s alternative to the widely-supported 3 cents/oz. soda tax. READ MORE


 

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they got it right“Given the growing public support and the proven benefits of the Mayor’s plan for the poorest children in our city, we urge members of council to reject any alternatives that meet the needs of soda companies but undermine the future of our children.” PCCY statement on Council President Darrell Clarke’s alternative soda tax plan. READ THE FULL STATEMENT