Last year, Philadelphia passed a soda tax that was meant to curb obesity but was really a measure to eat away at the ballooning budget deficit. The city of brotherly corruption passed a law that would see a 1.5 cent per ounce tax on soda and other sweetened and diet beverages.
How did that work out? Well, certain Philadelphia workers are getting pink slips this month.
Since Philadelphia put the soda tax into effect, beverage sales have plummeted, and companies are reacting, including Pepsi. The soda behemoth, which has seen its sales plunge 40 percent in the city, announced lat week that it will lay off 20 percent of its workforce, or 100 workers, at three distribution plants that serve Philadelphia.
“Unfortunately, after careful consideration of the economic realities created by the recently enacted beverage tax, we have been forced to give notice that we intend to eliminate 80 to 100 positions, including frontline and supervisory roles,” PepsiCo Inc. spokesman Dave DeCecco said in a statement (via Philly.com).
Of course, city hall is acting like its a victim and is blaming Pepsi for the job losses.
Here is just one example of the asinine viewpoints of municipal bureaucrats:
“The soda industry sunk to a new low today,” city spokeswoman Lauren Hitt said. “They are literally holding hostage the jobs of hard-working people in their battle to overturn the tax. Pepsi reported nearly $35 billion in gross income and $6 billion in profit last year…. The idea that they can afford to do that but ‘must lay off workers’ should make every Philadelphian very skeptical of whether these layoffs are actually due to the tax.”
When will public officials understand that taxes only lead to various unintended consequences. Whether it’s a soda tax or a fat tax, there are always negative ramifications.
In Denmark, for instance, the government abolished the world’s first fat tax because there were widespread job losses, people were not consuming less fat and consumers even smuggled in food from Germany (SEE: Danish government abolishing the world’s first fat tax, cites economic failures).
Despite this evidence, more and more jurisdictions worldwide are at least considering these asinine policies.