Philadelphia became the second city in the United States to implement a “soda tax” in 2017 with the intention that it would force consumers into making healthier drink selections.
But a new study published in medical journal JAMA last week reveals the tax has produced unintended consequences.
What are the details?
The study found that during the first year of the tax, soft drink sales fell a whopping 51 percent within the Philadelphia city limits.
The study compared beverage costs and sales in Philadelphia — following implementation of the 1.5 cents per ounce tax — with Baltimore, which has a similar demographic but doesn’t have the same sales tax. With the tax, beverages in Philadelphia jumped from 5.43 cents per ounce in 2016 to 6.24 cents in 2017. In Baltimore, beverages went up from 5.33 cents per ounce to just 5.50 cents.
However, the study also found that after Philadelphia implemented its new tax that soda sales in neighboring municipalities — which do not have the tax — went up.
That means people were traveling outside of Philadelphia to still consume sugary drinks, just at a lower price. The result, of course, undermines the desired effect of the law, which is to improve consumer health by economically limiting marketplace choices, while proving what many critics of the tax said would happen.
According to JAMA, traveling consumers at least “partially offset” the decreased sales that resulted from the tax.
What else has the law done?
(H/T: Hot Air)