The beverage tax that went into effect in Philadelphia on Jan. 1, 2017, has had damaging consequences for working families, small businesses and workers across the city.  Local Philadelphia news outlet Billy Penn recently spoke to some of the retailers feeling the brunt of the pain from the tax.  

Independent grocery store owner Don Petzak told Billy Penn said his store has seen a drop in overall sales, not just in beverage sales. He said because of the tax he is just trying to survive. “This tax has changed the environment,” Petzak said. “We were not trying to survive but trying to excel. ‘At least you’re not going out of business?’ Is that a good attitude? When you’re trying to improve yourself and your store, it’s disheartening.”

Many neighborhood stores like Petzak’s are community anchors that are losing customers to the suburbs as a result of the tax. And according John Stanton, a professor of food marketing at St. Joseph’s University, these independent grocery stores operate on razor thin margins.  “They’re just making it,” he said. “Small changes in revenue or cost are going to put them over the limit.”

The tax has not only caused sales declines but also job losses as grocery stores and beverage distributors have been forced to announce layoffs in the hundreds. Other employees have seen their hours cut and their paychecks reduced.

Philadelphia shows us that taxes have very real consequences. We hope that other cities, states and municipalities will learn from Philadelphia and not repeat its mistake.