Who Benefits from the Philadelphia Soda Tax? All Philadelphians, and especially those with low-incomes


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The tax on sugar-sweetened beverages (SSBs) proposed by Mayor Kenney, also known as the “soda tax,” is controversial mainly because, like other sales taxes, it takes a greater share of the income of poor families than rich ones. However, while the costs of the soda tax fall more heavily on those with low incomes, more of the benefit of the tax will go to low-income Philadelphians as well, for two reasons:

The first benefit of the tax flows from how the new revenue will be spent — on pre-K education, community schools, and parks and community recreation centers. Pre-K education helps kids from low- and moderate-income families have a better start in life. Studies have shown that children who attend pre-K programs score higher on academic tests and that these benefits are greater for those whose families have lower incomes. And the effects of Pre-K education are long lasting: long-term studies have shown that those who receive Pre-K education have higher IQs at age 5, have higher high school graduation rates, are more likely to own a home and have higher incomes at age 40.

Recreation centers and parks not only provide benefits to individuals, young and old, but are at the center of vibrant Philadelphia neighborhoods. They provide not just fun but hope for kids. And while everyone in Philadelphia benefits from them, they are especially important to those with low- and moderate- incomes who don’t have the means to use private alternatives.

It is true that there are other ways to fund Pre-K education and parks and recreation centers. And, given the income gap between rich and poor in Philadelphia and the United States as a whole, it could be argued that these goods should by paid for by those with higher incomes.

But the second benefit of a soda tax — the contribution it will make to the health and economic well-being of all Philadelphians, and especially those with low incomes — depends on this specific tax on sugar-sweetened drinks. Those benefits are not as obvious, but provide a critical element in the case for a soda tax.