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Sugar tax has good motivation but poor execution

Fighting two problems with one tax proposal, Pittsburgh Mayor Luke Ravenstahl is currently aiming to fill the hole in the city’s budget as well as promote healthy living among Pittsburghers with a new tax on sugar-sweetened beverages. In comparison with the previously proposed tuition tax, this new tax idea — adopted from Philadelphia Mayor Michael Nutter’s similar legislation — appears to have a more practical rationale behind it. Yet, when it comes to execution, it fails once again.

At present, the tax will raise the prices of sweetened beverages by two cents per ounce. This will cause consumers to spend roughly $0.17 extra when they buy a can of Red Bull or $1.35 more for a two-liter bottle of Coca-Cola — roughly a 100 percent tax. When this is compared to the pouring tax, currently set at 7 percent, the disparity is easy to see. Looking at it in broader terms, upon purchasing 10 two-liter bottles of Coca-Cola, consumers will be paying an unreasonable $13.50 just in taxes — a substantial increase in prices that seems extreme, especially to consumers without deep pockets.

While it is laudable that Ravenstahl is attempting to put together a Healthy Pittsburgh Initiative by discouraging residents from consuming sugar-sweetened beverages, the resulting increase in the prices of soda, energy drinks, iced tea, and sports drinks is unfairly high. Furthermore, because the tax is regressive, it is harsher on the poor. Currently the tax is too large to be justified, and while it is fills a necessary gap in the city’s pension fund, the mayor needs to make sure he is not hurting the financial welfare of Pittsburghers in his various attempts to rake in some dough.