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Here’s why Philadelphia residents are outraged about the new soda tax

With a 13-4 City Council vote, last week Philadelphia became the first major city to pass a 1.5 cent per ounce tax on sugary drinks. While it’s a win for Mayor James Kenney, some city residents and business owners are outraged.

“I really don’t like it. I’m disappointed in it,” one Philadelphia resident told Yahoo Finance’s Seana Smith in the video above. “I think it's incredibly regressive, and I think the population it's purported to aid and help is exactly the population it's going to negatively affect.”

The tax is expected to generate $91 million in the first year and up to $386 million over five years. Some of the money will be earmarked for improving early education and fixing neglected infrastructure such as parks and recreation facilities in the inner city.

But here’s what Yahoo Finance found out when talking to Philadelphia residents: They’re upset that all of the money is not being allocated to pre-K and parks and recreation facilities. During final negotiations with council members, it was determined that some of the money generated from the tax will go to the city's general fund and other expenditures including retrials for juveniles.

A Philadelphia resident told Yahoo Finance that he doesn’t agree with how the tax will be spent, calling City Council's decision a "disgrace." Another critic of the tax said it will have a negative impact on the restaurant industry and cause sales to slow.

Here’s why: People who buy sugary drinks in the city of Brotherly Love will have to pay an additional 18 cents in tax for each 12-ounce can of soda and $2.16 in tax for each 12-pack purchased.

The new tax will affect thousands of beverages—essentially anything that contains either artificial sweetener or sugar.  Drinks that will not be taxed are those that are more than 50% juice or milk.

Philadelphia will start collecting the tax January 1.

 

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