The Briefing Room
General Category => Economy/Business => Topic started by: Right_in_Virginia on February 22, 2017, 08:09:07 pm
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Philadelphia Soda Tax Leads To 30-50% Plunge In Sales, Mass Layoffs
Zero Hedge, Feb 22, 2017, Tyler Durden
When Philadelphia became the first US city to pass a soda tax last summer, city officials were eagerly looking forward to the surplus-tax funded windfall to plug gaping budget deficits (and, since this is Philadelphia, the occasional embezzlement scheme). Then, one month ago, after the tax went into effect on January 1st we showed the tax applied in practice: a receipt for a 10 pack of flavored water carried a 51% beverage tax. And since PA has a sales tax of 6% and Philly already charges another 2%, the total sales tax was 8%. In other words, a purchase which until last year came to $6.47 had overnight become $9.75.
(http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/02/08/soda%20receipt_0.jpg)
What happened next? Precisely what most expected would happen: full blown sticker shock, and a collapse in purchases.
According to Philly.com reports, two months into the city’s sweetened-beverage tax, supermarkets and distributors are reporting a 30% to 50% drop in beverage sales and - adding insult to injury - are now planning for layoffs.
One of the city's largest distributors told the Philadelphia website it would cut 20% of its workforce in March, and an owner of six ShopRite stores in Philadelphia says he expects to shed 300 workers this spring. “People are seeing sales decline larger than anything they’ve seen up to this point in the city,” said Alex Baloga, vice president of external relations at the Pennsylvania Food Merchants Association.
More: http://www.zerohedge.com/news/2017-02-22/philadelphia-soda-tax-leads-30-50-plunge-sales-mass-layoffs
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:bigsilly:
I'll bet surrounding towns are, collectively, showing a comparable upturn in sales.
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There are other options to consider for the subjects in Philly.
Sports Drinks Are Now More Expensive than Beer Thanks to the Philadelphia Soda Tax
https://taxfoundation.org/sports-drinks-are-now-more-expensive-beer-thanks-philadelphia-soda-tax/
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Liberal Douche nozzle and Mayor Kenney harshly rebuked reports of coming layoffs late Tuesday night.
"I didn't think it was possible for the soda industry to be any greedier," Kenney said in an emailed statement. “…They are so committed to stopping this tax from spreading to other cities, that they are not only passing the tax they should be paying onto their customer, they are actually willing to threaten working men and women's jobs rather than marginally reduce their seven figure bonuses."
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:bigsilly: I'll bet surrounding towns are, collectively, showing a comparable upturn in sales.
@Oceander
This is the free market working. Put a high tax on something and people won't buy it. They will find a substitute, and/or, as you say, when they go outside the tax district, they will buy it there.
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Liberal Douche nozzle and Mayor Kenney harshly rebuked reports of coming layoffs late Tuesday night.
"I didn't think it was possible for the soda industry to be any greedier," Kenney said in an emailed statement. “…They are so committed to stopping this tax from spreading to other cities, that they are not only passing the tax they should be paying onto their customer, they are actually willing to threaten working men and women's jobs rather than marginally reduce their seven figure bonuses."
What a fool. Like most Liberals, he is unable to comprehend simple economics. It is not their fault that you decided to tax them into bankruptcy.
If they pass the tax on, they sell less products. If they sell less products then their bonuses are smaller. Idiot.
So this whiney crybaby screed about 'it's not my fault' is pure bullshit. It is your fault. You own it. Now be a man and own up to what you supposedly believe in.
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Liberal Douche nozzle and Mayor Kenney harshly rebuked reports of coming layoffs late Tuesday night.
"I didn't think it was possible for the soda industry to be any greedier," Kenney said in an emailed statement. “…They are so committed to stopping this tax from spreading to other cities, that they are not only passing the tax they should be paying onto their customer, they are actually willing to threaten working men and women's jobs rather than marginally reduce their seven figure bonuses."
I often wonder if Philthy can elect a worse POS Mayor then they have and then they go a prove that they can. This fat slob Kenney is a complete moron and it is great to see this explode in his face.
I got a dollar that he proposes fines and more taxes to offset this disaster.
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They even put the taxed on flavored bottled water!!
omg
It's not hard to cross the city limit line to buy soda
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Liberal Douche nozzle and Mayor Kenney harshly rebuked reports of coming layoffs late Tuesday night.
"I didn't think it was possible for the soda industry to be any greedier," Kenney said in an emailed statement. “…They are so committed to stopping this tax from spreading to other cities, that they are not only passing the tax they should be paying onto their customer, they are actually willing to threaten working men and women's jobs rather than marginally reduce their seven figure bonuses."
What a complete imbecile.
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@Oceander
This is the free market working. Put a high tax on something and people won't buy it. They will find a substitute, and/or, as you say, when they go outside the tax district, they will buy it there.
Exactly.
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Liberal Douche nozzle and Mayor Kenney harshly rebuked reports of coming layoffs late Tuesday night.
"I didn't think it was possible for the soda industry to be any greedier," Kenney said in an emailed statement. “…They are so committed to stopping this tax from spreading to other cities, that they are not only passing the tax they should be paying onto their customer, they are actually willing to threaten working men and women's jobs rather than marginally reduce their seven figure bonuses."
Somebody doesn't understand Econ 101 :whistle:
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Liberal Douche nozzle and Mayor Kenney harshly rebuked reports of coming layoffs late Tuesday night.
"I didn't think it was possible for the soda industry to be any greedier," Kenney said in an emailed statement. “…They are so committed to stopping this tax from spreading to other cities, that they are not only passing the tax they should be paying onto their customer, they are actually willing to threaten working men and women's jobs rather than marginally reduce their seven figure bonuses."
It is hard to imagine true economic illiteracy until one hears it. And it is all the more striking coming from a supposed adult with something more than a 2nd-grade education. But then again, it's a Philadelphia Democrat we're talking about here...
Honestly: this cretin has not the slightest idea that if a manufacturer lowered their prices to their distributors by an amount equal to this idiotic tax, they would bankrupt themselves almost immediately, as the cost of production would far exceed their return on sales.
And here is further evidence that Democrats think of businessmen as evil incarnations of the Monopoly Man, rolling in bags of loot, stolen from the workers.
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:bigsilly:
I'll bet surrounding towns are, collectively, showing a comparable upturn in sales.
They are. The only soda I purchase anymore in the city is the Diet Coke I enjoy with my lunch. The only folks left paying the tax on soda for home consumption are those too poor to be able to travel outside the city limits to buy it.
Some in-city retailers are apparently purchasing their soda by picking it up at out-of-town distributors. So long as the soda isn't delivered, and is picked up at the premises of the out-of-town distributor, there is apparently no obligation for the distributor to police where the soda is actually going. (I bet that such retailers still jack up their price as if the tax was being paid).
Finally, the threat by the six Brown's Shop Rite stores to lay off 300 people because of the soda tax doesn't smell right to me. If they have to lay off that many, I suspect they have more problems than cratered soda sales. if it comes to that, it will be a shame. Brown's was operating full-service supermarkets in the urban core when no one else was.
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Somebody doesn't understand Econ 101 :whistle:
Indeed!
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Indeed!
Don't worry lots of folks tell me the government is the best at protecting our health and handling our insurance. :beer:
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(http://www.politicspa.com/wp-content/uploads/2015/08/Kenney-Happy-300x257.jpg)
Thinks passing a tax will be borne by company not passed on to consumers?
Too bad these diverse cities, won't elect moderates or conservatives.
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Don't worry lots of folks tell me the government is the best at protecting our health and handling our insurance. :beer:
The ACA is flawed just like the Philly soda tax because it ignores the basics of Econ 101. No argument with you there. The current death spiral is happening because of the rational actions of millions of younger Americans to reject ACA insurance as a bad deal.
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Finally, the threat by the six Brown's Shop Rite stores to lay off 300 people because of the soda tax doesn't smell right to me. If they have to lay off that many, I suspect they have more problems than cratered soda sales. if it comes to that, it will be a shame. Brown's was operating full-service supermarkets in the urban core when no one else was.
Grocery stores operate on an extremely thin margin and trying to do that in the inner-cities is especially hard. Trying to do that in urban areas where the government does it's best to make it hard to do business is enough to make a business relocate.
Remember that Brown sought out state subsidies before he opened them. he also did a massive amount of market research on how to sell healthier, fresher food to those customers. Like grilling the chicken in the store where people can hear the sizzle and smell it, or have the pizza made right there in front of the customer. They learned from failures in other cities.
Some of them have bars now, "Beer Gardens".
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When Dallas subsidized a grocery store in downtown (where few actually live) the store kept asking for more money from the city.
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They even put the taxed on flavored bottled water!!
omg
It's not hard to cross the city limit line to buy soda
They will make that illegal for Phiily residents and enforce it with roadblocks at the city limits to search every car for imported sody pop. Hizzonner Kenny will teach those ungrateful bastards who's in charge.
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They will make that illegal for Phiily residents and enforce it with roadblocks at the city limits to search every car for imported sody pop. Hizzonner Kenny will teach those ungrateful bastards who's in charge.
walls around every city
Yes! We can Make America Medieval Again! (Okay, not "again")
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They even put the taxed on flavored bottled water!!
omg
It's not hard to cross the city limit line to buy soda
Sure. Businesses in Trenton , Lawrenceville,etc, in Mercer County NJ right across the river will boom. There are Costcos, Sam's Clubs and BJ's all within a 20 mile radius of Philly if you go over the river.
The other day I saw someone buy 39 bottles of pop on sale in front of me at my local Stop and Shop. I didn't make the correlation until now. Maybe he was from Philly. Or he was throwing a party. But all he bought was 39 bottles of cola, on sale for 89 cents each.
Maybe he's going into Philly and selling it from his truck?
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Sure. Businesses in Trenton , Lawrenceville,etc, in Mercer County NJ right across the river will boom. There are Costcos, Sam's Clubs and BJ's all within a 20 mile radius of Philly if you go over the river.
The other day I saw someone buy 39 bottles of pop on sale in front of me at my local Stop and Shop. I didn't make the correlation until now. Maybe he was from Philly. Or he was throwing a party. But all he bought was 39 bottles of cola, on sale for 89 cents each.
Maybe he's going into Philly and selling it from his truck?
Going to Camden for some coke takes on a new meaning.
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Going to Camden for some coke takes on a new meaning.
:silly:
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Liberal Douche nozzle and Mayor Kenney harshly rebuked reports of coming layoffs late Tuesday night.
"I didn't think it was possible for the soda industry to be any greedier," Kenney said in an emailed statement. “…They are so committed to stopping this tax from spreading to other cities, that they are not only passing the tax they should be paying onto their customer, they are actually willing to threaten working men and women's jobs rather than marginally reduce their seven figure bonuses."
Did he really say that? *bouche*
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Sure. Businesses in Trenton , Lawrenceville,etc, in Mercer County NJ right across the river will boom. There are Costcos, Sam's Clubs and BJ's all within a 20 mile radius of Philly if you go over the river.
The other day I saw someone buy 39 bottles of pop on sale in front of me at my local Stop and Shop. I didn't make the correlation until now. Maybe he was from Philly. Or he was throwing a party. But all he bought was 39 bottles of cola, on sale for 89 cents each.
Maybe he's going into Philly and selling it from his truck?
I agree with the last point. They have probably single handedly created a black market for sodas.
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The entire state of California will likely adapt this same tactic.
Nobody is loonier than Governor Moonbeam
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I agree with the last point. They have probably single handedly created a black market for sodas.
Who would have thought that that could happen?
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Who would have thought that that could happen?
The same folks who created the black market for cigarettes by taxing them to insane levels.....
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I agree with the last point. They have probably single handedly created a black market for sodas.
Psssst Hey Kid...over here. You wanna buy some soda?
(http://static.tvtropes.org/pmwiki/pub/images/f_6611.jpg)
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I wonder how this will affect the fast food industry.
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I wonder how this will affect the fast food industry.
1.5 cents per ounce changes their total charges for a meal a far lower percentage. It is still passed on, but won't be noticed as much.
https://billypenn.com/2017/01/07/philly-restaurant-owners-on-the-soda-tax-thank-god-its-not-on-meat/
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The bright side - it now makes more sense then ever to drink beer.
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The bright side - it now makes more sense then ever to drink beer.
And there's evidence it's healthier. At least in moderation. :beer:
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And there's evidence it's healthier. At least in moderation. :beer:
Moderation is for monks......
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This tax, and the mayor's reaction to the layoffs, is a perfect exhibit of progressive economic policies. They look at one side of an equation. These people on the city council raised soda taxes and believed it would result in a windfall of money. But, there is a saying that goes if you want less of something, tax it. If you want more of something, subsidize it. They had no understanding how people adjust to the resulting higher prices. It isn't just soda. Progressives create market distortions and then become indignant of the results. They need something to blame for the failure of their policies and the company that is laying off workers as a result of the tax becomes a target
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What a fool. Like most Liberals, he is unable to comprehend simple economics. It is not their fault that you decided to tax them into bankruptcy.
If they pass the tax on, they sell less products. If they sell less products then their bonuses are smaller. Idiot.
So this whiney crybaby screed about 'it's not my fault' is pure bullshit. It is your fault. You own it. Now be a man and own up to what you supposedly believe in.
@240B
I think the mayor knows what he's doing. Sure, like all progressives, he's ignorant on basic economics. But going after the company for layoffs that have resulted from his tax gives him the perfect scapegoat.
Let's be honest. Do you believe basic economics is an understandable concept among the citizens in Philadelphia?
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Since the "soda tax" ain't workin' as planned, they'll have to try another approach.
Watch 'em slap high taxes on beef, pork and ham next!
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There are other options to consider for the subjects in Philly.
Sports Drinks Are Now More Expensive than Beer Thanks to the Philadelphia Soda Tax
https://taxfoundation.org/sports-drinks-are-now-more-expensive-beer-thanks-philadelphia-soda-tax/
LOL, nothing new. When I was stationed in Germany, it was cheaper to drink two litres of beer than it was to buy a 6 oz glass of Coke (without ice) at restaurants. Probably wasn't due to taxes, but I usually drank beer, of course.
And we're not talking Bud Light, either!
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There are other options to consider for the subjects in Philly.
Sports Drinks Are Now More Expensive than Beer Thanks to the Philadelphia Soda Tax
https://taxfoundation.org/sports-drinks-are-now-more-expensive-beer-thanks-philadelphia-soda-tax/
I was going to say, the seven course meal (tato chips and a six pack of coke) will just be chips and a six pack. (or maybe a couple of 40s...)
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:bigsilly:
I'll bet surrounding towns are, collectively, showing a comparable upturn in sales.
Yeah. Running 'Kickapoo Joy Juice' could be a moneymaker again! :silly:
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@Oceander
This is the free market working. Put a high tax on something and people won't buy it. They will find a substitute, and/or, as you say, when they go outside the tax district, they will buy it there.
Case in point: John Kerry and his yacht purchase:
John Kerry registers his new yacht in Rhode Island to avoid $500,000 in Massachusetts taxes
John Kerry recently purchased a new yacht for $7 million and is berthing this new vessel in Rhode Island to avoid paying $500,000 in taxes to the state of Massachusetts
https://americaswatchtower.com/2010/07/23/john-kerry-registers-his-new-yacht-in-rhode-island-to-avoid-500000-in-massachusetts-taxes/ (https://americaswatchtower.com/2010/07/23/john-kerry-registers-his-new-yacht-in-rhode-island-to-avoid-500000-in-massachusetts-taxes/)
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Case in point: John Kerry and his yacht purchase:
https://americaswatchtower.com/2010/07/23/john-kerry-registers-his-new-yacht-in-rhode-island-to-avoid-500000-in-massachusetts-taxes/ (https://americaswatchtower.com/2010/07/23/john-kerry-registers-his-new-yacht-in-rhode-island-to-avoid-500000-in-massachusetts-taxes/)
Hard to believe the people of Massachusetts were happy with their Senator stealing half a million from the treasury.
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Hard to believe the people of Massachusetts were happy with their Senator stealing half a million from the treasury.
They were not happy. And after getting caught, he coughed up the payment.
Kerry Agrees to Pay Massachusetts Tax on Yacht Docked in Rhode Island
http://www.foxnews.com/politics/2010/07/27/kerry-agrees-pay-massachusetts-tax-yacht-docked-rhode-island.html
...Massachusetts officials said Kerry was within his rights to base the vessel in Rhode Island, despite owning homes in Nantucket and Boston, but they also said he would be liable for taxes if he brought the yacht to Massachusetts within six months of taking ownership.
Subsequent news accounts placed the Isabel in Nantucket over the Fourth of July weekend and on Martha's Vineyard more recently....
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They were not happy. And after getting caught, he coughed up the payment.
Kerry Agrees to Pay Massachusetts Tax on Yacht Docked in Rhode Island
http://www.foxnews.com/politics/2010/07/27/kerry-agrees-pay-massachusetts-tax-yacht-docked-rhode-island.html
...Massachusetts officials said Kerry was within his rights to base the vessel in Rhode Island, despite owning homes in Nantucket and Boston, but they also said he would be liable for taxes if he brought the yacht to Massachusetts within six months of taking ownership.
Subsequent news accounts placed the Isabel in Nantucket over the Fourth of July weekend and on Martha's Vineyard more recently....
Replace "John Kerry" with "Donald Trump", and one can imagine the reaction... :silly: