This is one of those days where I turn Philadelinquency over for someone else to write something for a change. If you have something interesting to write-up or would like to be a regular contributor here, applications and phone lines are open.
Another regressive tax fail
First it was the $2 cigarette tax that was implemented in 2014 to aid city schools. That was projected to raise $75 million in FY17 but instead is now projected to only bring in $49.6 million by the City Controller’s office; a $25 million dollar “error”.
Now it’s the soda tax that’s failing. It was projected to haul in $46 million by the end of June. Current collections (at the end of April) show only $25.6 million received so far. It seems very unlikely that the city will collect $10 million dollars in both May and in June to make the $20 million deficit (this on top of $6.5 million in April’s collections).
The administration is so beholden to their terrible idea, they will not be revising their end of year or 5 year projections. Nope.
Instead they will only be adjusting the current FY projections so they can mask their failure. Instead of rethinking their idea, the Kenney administration has decided instead that there must be an issue in the collecting of the tax, as if there was a “pot of gold” amounting to $3.5 million dollars out there, by hiring nine new employees to the revenue department.
Wonder why Philadelphia has the largest deep poverty population in America of over 200,000? Part of the problem are stupid ideas like this regressive tax. A regressive tax is a tax that attacks lower income individuals and families which is exactly what the cigarette tax and soda tax do.
Those at the poverty line or below are almost twice as likely to be a smoker than those in the middle or upper classes. According to 2013 Gallup report only 20% of adults who make $75k or more per year drink full-calorie soda as compared to 45% for adults who make less than $30k or less per year.
Surely you would think that this point would have gotten the attention of our great leaders in City Hall. After all, it was published in 2013 and readily available to anyone with a phone or a computer. Well if that point doesn’t make a difference, how about the ability for middle and upper class citizens to purchase their cigarettes and sugary drinks outside the city? As jobs keep moving out of the city and little to no jobs are being created in the city, the large segment of the city’s working population who commute out of town for work gives them a unique opportunity on a daily basis to purchase all of their cigarettes and sugary drinks city tax free before they return. In 2013, it was estimated 15% of the working population commuted out of the city for work.
These taxes which are designed to punish the poor will continue. If only the administration looked inward, to programs and spending they could cut (i.e. the Mayor’s proposal to build a park over I-95, arresting pension benefit growth, selling more city-owned vacant land), we might actually be able to reverse the increase of poverty and deep poverty status which combined sits at 26% in Philadelphia.
Scott Waller, Vice Chair, Philadelphia Young Republicans
Gallup, I. (2013, August 15). Regular Soda Popular With Young, Nonwhite, Low-Income. Retrieved June 13, 2017