Dictionary.com defines chutzpah as:
1. unmitigated effrontery or impudence; gall.
2. audacity; nerve.
It was best explained to me as, “Someone who kills their parents, then throws themselves on the mercy of the court during the murder trial for being an orphan.”
This comes from the Washington Times article, Philadelphia soda tax fizzles in first month, layoffs likely: Reports.
When Liberals want to tax (control) something, they don’t believe that their actions will affect what they are trying to control. So they are genuinely surprised when the citizens’ behavior changes as a result of their actions. The truly amazing thing is Liberals use “sin taxes” as a means to change citizens’ behavior so that the citizens don’t do what Liberals consider “bad things,” i.e. smoking and drinking (both alcohol and sodas). They want you to change your behavior away from “bad things,” but then again they don’t want you to. It’s kind of like a “Have your cake and eat it too.”
Philadelphia instituted on January 1st 2017, a 1.5 cent per ounce tax on soda. Before the tax, Philadelphia consumed about 3.95 million gallons of soda per month. 3.95 million times $0.015 equates out to the $7.5 million in taxes they projected. This tax means on the personal level about $1.52 more when you purchase a 6-pack of 500ml ounce sodas or $1.01 for a 2-liter bottle.
The beginning of the article spoke about only $2.3 million was collected in January for the first months’ taxes. That translates to only 1.2 million gallons of soda was purchased, or a drop of 60%. The next several paragraphs are about how layoffs are already happening and more appear inevitable with the bottlers of the soda and grocery stores inside the city.
This drop represents the fact that citizens have altered their purchasing habits based on this tax. Either people are buying less, or they are shopping outside of Philadelphia where the tax is not collected. If you have watched Hillsdale’s Economics 101 video course, they repeatedly talk about how when prices rise, less people will choose to purchase that product or service, because it is no longer worth the increased price to them. Remember that 6-pack of soda above? That tax adds 50% onto the final price. A $2.99 six-pack now costs $4.51. That 99 cent 2-liter now costs $2.00 for a jump of 102%.
Near the end of the article, the Mayor’s office released a “full accounting” number of $5.7 million in taxes collected, or a drop of 24% of soda purchased. No matter how you slice it, a 24% drop is still a catastrophic drop in sales.
Here’s where the chutzpah comes in:
“I didn’t think it was possible for the soda industry to be any greedier,” Mayor Jim Kenney told the Inquirer. “They are so committed to stopping this tax from spreading to other cities that they are not only passing the tax they should be paying onto their customer, they are actually willing to threaten working men and women’s jobs rather than marginally reduce their seven-figure bonuses.” [emphasis mine]
I have seen the sign in many businesses, "We don't charge tax, we only collect it." If the Philadelphia city government directly taxed the bottlers this tax, the bottler would pass it along to the consumer just like every cost incurred in bringing the product to market. However, this tax is a sales tax, charged to no one but the consumer.
As far as the "marginally [reducing] their seven-figure bonuses" goes, evidently the mayor thinks that the soda bottlers should reduce their profits and prices so that the government can get their money. When I wrote that last sentence, the Dragnet 1967 episode “The Squeeze” came to mind. In that episode the bad guy was caught on a wiretap saying something like, “You’re going to start giving me 3% of your sales, or bad things will happen to you.” Basically, the mayor of Philadelphia is attempting to extort money from the soda bottlers. The Mayor wants his taxes and not a penny less than he thinks the government should get.
The continued collection of this tax will have disastrous consequences for the businesses who sell this product in that city. While all soda sales will not stop, the amount purchased in the city will virtually drop to zero. This will severely hurt grocery stores, fast-food establishments, convenience stores and all the other places that sell sodas. People will be put out of work, business will close and the one thing that will start that cascade is this tax.