Category Archives: War on the Poor

Philly Grocery Tax Goes Viral

NOTax

The people of Philadelphia are suffering from sticker shock when they visit the grocery store. The City of Brotherly Love defied its residents by passing a huge grocery tax on most beverages, and they’re not happy about it. Images are going viral of receipts that show the 1.5 cent-per-ounce tax impacting the wallets of everyday Philadelphians … in many instances the taxes are more than the price of the drink.

The Philly Grocery Tax is a mistake. While Mayor Kenney pitched his grocery tax as needed to fund early childhood education, the truth is that nearly 20 percent of the tax revenue raised will go to other government programs and budget priorities.

“The magnitude of this tax is historic and Philadelphian consumers can’t afford it,” said David McCorkle, CEO of the Pennsylvania Food Merchants Association.

Philadelphia’s Regressive, Illegal Tax

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After winning the Democratic nomination in an overwhelmingly Democratic city, Philadelphia mayoral candidate Jim Kenney kept pressing and campaigning ahead of the November 2015 elections. After the primary, the campaign focused almost exclusively on reducing poverty and expanding opportunity.

Kenney pledged to help people succeed in every neighborhood of Philadelphia.

However, after being elected mayor, Jim Kenney’s first major action wasn’t to expand economic opportunity. No, on the contrary, the Mayor deliberately and deceivingly targeted his city’s poorest residents with a regressive—illegal—tax on virtually everything in the beverage aisle.

While Mayor Kenney pitched his grocery tax as needed to fund early childhood education, the truth is that nearly 20 percent of the tax revenue raised will go to other government programs and budget priorities.

David Oh, a Republican who opposed the grocery tax, described the funding arrangement as misleading, saying that “This is not the narrative that had been told to the public.” And, Councilwoman Jannie L. Blackwell, a Democrat on the City Council who supported the measure, said she had no idea revenue from the tax was targeted for other purposes.

So, here are the facts on the Kenney tax:

  • The 1.5-cents-per-ounce tax goes into effect January 1, 2017.
  • The regressive, highly unpopular tax will add 18 cents to the cost of a can of soda, $1.08 for a six-pack or $1.02 for a two-liter bottle.
  • The new beverage tax will be added on top of the already excessive 8% sales tax that applies to beverages in Philadelphia.
  • Yes, the tax is unpopular – 58% of residents oppose the measure.
  • Yes, the tax will disproportionately harm poor residents – economic studies show that low-income Americans spend a larger portion of their income on consumer goods like soda.
  • No, the tax revenue—as the Mayor promised—is not being reserved exclusively for an expanded pre-K program or city parks and recreational facilities.
  • No, the tax is not legal – experts are calling the tax unconstitutional.

A coalition of consumers, businesses, and unions have filed a lawsuit to stop Philadelphia from collecting the tax, maintaining that it’s illegal under state law.

Mayor Jim Kenney might have persuaded the City Council to support a grocery tax with back-room deals and eleventh-hour concessions to individual council members. However, such sweet-deals and political horse-trading will be out-of-bounds in the judicial system. What will matter in the end is if the Mayor’s legal team can persuade the courts that the grocery tax is legal under Pennsylvania law.

Many legal experts, including Ronald Castille—former Chief Justice of the Pennsylvania high court—have concluded that the Philly tax is illegal:

  • The Philly tax is a de facto sales tax and preempted by state law.
  • The Philly tax violates Pennsylvania’s state Constitution’s Uniformity Clause.
  • The Philly tax conflicts with the federally funded Supplemental Nutrition Assistance Program (SNAP).

Capitol Allies and its partners will continue to offer analysis and commentary on the Philly tax so to better inform the public discussion as the anti-tax fight moves through the courts.

Update: Philly’s Mayor Kenney Pushes Regressive Tax on False Promise of Expanded Pre-K

On June 8, 2016 in Philadelphia, lawmakers took a crucial vote on an important issue for taxpayers, families, and consumers. The plan from Mayor Jim Kenney (D-Philadelphia) would have imposed a 3 cents-per-ounce tax on more than 1,000 beverages. However, at the eleventh-hour the Mayor dropped a bombshell: a tax at 1.5 cents-per-ounce but spread out to both sugary and diet beverages, and the tax revenue would go toward the city’s fund balance. The Mayor promised that the new tax would be dedicated to initiatives like expanded pre-K. Instead, he pushed through a massive, regressive grocery tax on a false promise.

Mayor Kenney’s expanded grocery tax is excessive and it will drive down wages and kill jobs. His tax targets the poor and robs resources from families living paycheck to paycheck.

Capitol Allies is a staunch opponent of arbitrary, regressive taxation.

Before the City Council took the vote, in an effort led by Capitol Allies, a broad coalition of taxpayer and free market groups sent this coalition letter to the Philadelphia City Council asking them to reject Mayor Kenney’s grocery tax.

NoPhillyGroceryTax

No Philly Grocery Tax

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More than a dozen national pro-growth, pro-job, free-market advocates have released a coalition letter asking the Philadelphia City Council to oppose Mayor Jim Kenney’s plan to impose a 3 cents-per-ounce tax on more than 1,000 beverages—the Philly Grocery Tax. The proposed Philadelphia-only tax will—as former Governor Ed Rendell made clear—unfairly hurt the city’s poorest residents while its wealthiest citizens will be able to avoid the tax altogether.

Media contact: Jerry Rogers 202.302.9783 / Jerry@capallies.com

Jerry Rogers is the founder of Capitol Allies, an independent, nonpartisan effort that promotes free enterprise, and he’s the co-host of  The LangerCast on the RELM Network.

 

Philly’s Mayor Jim Kenney Targets Poor

http://tinyurl.com/PhillySodaTaxHurtsPoor

Mayor Jim Kenney (D-Philadelphia) wants to add universal pre-Kindergarten to the city’s public schools. However, the city is overtaxed and the schools are in distress.

The Mayor’s plan is to impose a beverage tax–3 cents per ounce–on the residents of his city. At a press conference announcing the massive tax, Mayor Kenney said, “… this is not personal toward Big Soda, but there’s a lot of money being made off the backs of poor people.”

Who will be pay the tax? Ed Rendell, the former Democratic governor of Pennsylvania, said that Kenney’s tax “unfairly hits poor people.”  It’s Kenney who is seeking to raise money “off the backs of poor people.”

Experts in early-childhood care and education across the political spectrum agree that the first and best teachers for our children are parents and family members. However, Mayor Kenney has offered a tax scheme that will drain from families the earnings that would be better spent on quality child care, and cheat them out of the quality time devoted to their children.

Universal pre-K can be a worthy goal. However, it must be done right, not on the backs of Philly’s poorest families.

Click here to listen to our discussion of the mayor’s tax. We’re joined on The LangerCast by Michi Iljazi from the Taxpayers Protection Alliance.

 

Philly Soda Tax Breaks the Rules and Hurts the Poor

Philly Soda Tax Hurts the Poor Institute for Liberty 3/15/2016

By Jerry Rogers

Mayor Jim Kenney (D-Philadelphia) has proposed a massive tax hike on the residents of his city. The soda tax, set at 3 cents an ounce, will be an added cost on top of the city’s existing 8 percent sales tax.  Today, a 67-ounce bottle of Coke is $1.99. Kenney’s soda tax would add $2.01 to the price, more than doubling the cost.

Kenney says the tax will raise $400 million over five years to pay for a universal pre-K program. But, this is a cruel deception.

The mayor’s proposal breaks all the rules on “Tax it or not” Situations:

  1. When you tax something more you get less of it.
  2. If X and Y are two locations, and if taxes are higher in X and lower in Y, consumers will have a greater incentive to shop in Y.
  3. Businesses don’t pay taxes. They pass the cost of all taxation onto their customers in the prices of the goods and services they sell

Imagine a scenario: Compare two states or two cities — one with a giant tax on beverages and one without. Then do your own calculation and analysis. The results should be apparent. States and cities with lower tax burdens always have higher and faster growing economies and personal incomes than in states or cities with rising tax burdens. For evidence, look at 1990s New York City. Under Rudy Giuliani New Yorkers’ tax burden was reduced by nearly 20% – its lowest level in generations. Giuliani cut taxes 23 times, and the whole city benefited, from Wall Street to Main Street and from lower Manhattan to the Bronx.

Kenney’s tax on beverages is fundamentally unfair. The Kenney tax is regressive, betraying—for Democrats particularly—the sacrosanct principle of tax fairness. Mayor Kenney’s tax will disproportionately harm low-income individuals, as they spend a larger portion of their income on consumer goods like soda.

A soda tax will hurt Philly’s poorest families, and it won’t fund universal pre-K. Those who can will buy their beverages outside of the city’s limits. And, such arbitrary taxation will have businesses and jobs fleeing Philadelphia.

Kenney’s tax proposal is not a tax on Big Soda. It’s a tax on Philadelphia’s poorest residents.

Philly Soda Tax will Crush the Poor

By Jerry Rogers

In politics in most big cities – Philadelphia, New York, San Francisco – politicians turn on the very people who elect them.

Consider Mayor Jim Kenney’s outrageous, regressive proposal in Philly to tax soda at 3-cents-per-ounce! Who will end up paying the tax? Poor residents who can’t afford to travel outside the city. What’s great news for Jersey – “Tonight I’m gonna take that ride across the river to the Jersey side” – is tragic for Philly.

Ironically, Kenney opposed a similar tax when Mayor Nutter pushed for it in 2010 and 2011. Nutter’s bids failed. Now Kenney hopes his massive soda tax will raise $400 million in five years to pay for universal pre-K. What will happen to the pre-K program when the money doesn’t come in?

A soda tax will hurt Philly’s families and businesses, and it won’t fund universal pre-K. Those who have means will buy their soda elsewhere.

This unfair, unsustainable tax should be defeated.  Shame on Kenney – and all in the political class – for turning their backs on the people.