Our Editorial: Cities shouldn’t tax our pop
Michigan lawmakers are making sure your soda is safe. (Your what? Your pop.) Following attempts by local governments in nearby cities to tax sugary beverages, the House and Senate have passed a ban on local governments putting such measures in place.
It’s up to Gov. Rick Snyder now to sign the legislation. This should be a no-brainer.
The Michigan Constitution prohibits a state sales tax from being applied to groceries. This bill would close any loopholes local governments might be able to work around to tax beverages.
There’s a reason groceries are prohibited from being taxed already; taxes on food and beverages hurt families, particularly lower-income families, the hardest. Researchers argue a sales tax on grocery items is among the most regressive of taxes as the majority of the cost is borne by low-income families.
The Tax Foundation estimates that families with incomes of about $100,000 annually suffered half the harm from these taxes as poor families making about $20,000 annually.
And the Center on Budget and Policy Priorities in Washington, D.C., estimates food and beverage taxes are “four to five times as high for poorer families as for upper income families.”
Local governments in Philadelphia and Cook County, Illinois, have enacted taxes similar to the infamous tax former Mayor Michael Bloomberg imposed on New York City.
But residents in Cook County are on the brink of rescinding the 1-cent-per-fluid-ounce tax imposed on sodas sold in their region due to its wild unpopularity.
In Philadelphia, PepsiCo said it’s seen a 43 percent drop in business, which will soon lead it to lay off 80 to 100 area employees — almost a quarter of the total employees for that region. Similarly, Canada Dry gave employees notice they would be laid off.
Additionally, the city hasn’t seen the projected revenue come in. Philadelphia estimated the beverage tax would amass about $92 million annually. After failing to create the expected revenue in the first six months of 2017, the city readjusted its expectations to half that: $46 million for the year.
Shoppers are also simply crossing county lines to buy cheaper soda, harming Philadelphia residents two-fold.
About half the revenue from the tax is being put toward education, always an admirable goal. But residents — particularly low-income residents — shouldn’t be squeezed at every turn to find those funds.
These taxes are often marketed as healthy eating campaigns. But such attempts to regulate residents’ health always fall flat. Additionally, soda sales have and will continue to decrease as consumers are naturally becoming more health-conscious.
No localities in Michigan are currently considering such a tax, so this bill will have no immediate effect except to protect groceries from additional levies — a clear directive established in the state’s constitution.
Snyder should sign the bill into law.