Economic Moron Revisited – Soda Tax Costing Jobs as Sales Plummet

by Steve MacDonald

Jim-KenneyIf you have not been following the economics 101 lesson produced and directed by Philadelphia Mayor Jim Kenney, please pay attention. Kenney and his merry band of  Municipal thieves attempted to raise revenue with a massive wholesale tax increase on sugary beverages. They sold it as a way to fund pre-k and public park restoration. But it’s not going as the planners planned.

Two months into the city’s sweetened-beverage tax, supermarkets and distributors are reporting a 30 percent to 50 percent drop in beverage sales and are planning for layoffs.

One of the city’s largest distributors says it will cut 20 percent of its workforce in March, and an owner of six ShopRite stores in Philadelphia says he expects to shed 300 workers this spring.

Hi, I’m Jim Kenney can I talk to you about my job loss program?

The planners did estimate up to a 27% decline in sales from the tax, but I don’t think Job loss was part of the calculus. Not advertised job loss.

I’m also not clear on whether they were using this tax as social engineering. The tobacco tax narrative is that it will reduce smoking on one end and net societal gains through reduced health care costs at the other end. Soda (salt, butter, etc.) is on the same busy-body spectrum of things whose consumption progressive geniuses claim they’d like to curtail for the benefit of the collective.

The problems begin when the same people brag about all the revenue they’ll generate to fund programs that are not on a budgetary slope of diminishing return. Anyone with a fifth-grade education before the intervention called Everyday Math and its evil offspring (who is not a politician) know that if the end game of the tax is to stamp out unwanted behavior, you must then eliminate the revenue stream with it. But the first thing that the progressive geniuses bitch about is any decline in revenue.

These experts on human behavior always seem to get that wrong.

Those who can have chosen to purchase soda outside the city, beyond the reach of Philly’s progressive overseers. Others have sought sweet drinks outside the scope of another regressive tax. Some just stopped drinking it.

Business owners, including those having to lay off employees, have passed the increase on to customers which Mayor Kenney claims is unfair.

He thinks they are gouging customers for profit.

I think that’s ironic coming from the mayor gouging business owners and thinking there are no consequences especially when his campaign slogan when he ran for mayor is, “He Gets It.

I don’t believe he does.

 

H/T Watchdog

Leave a Comment

  • Ed Naile

    Econocomedynomics – simple “supply less and demand more”

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