"On January 1st, the controversial Philadelphia soda tax took effect. It is levied at a rate of 1.5 cents per ounce, which is 24 times the tax levied on beer in the state of Pennsylvania. This stark new tax has prompted a few interesting reactions on Twitter as customers are starting to see just how large the effects on prices of sweetened beverages in the city are. One person on Craigslist (the post has now been flagged for removal) posted a joke page offering to smuggle in untaxed soda, noting that they “deal in weight only” and “cash or Bitcoin accepted.”
My colleague Bill Rickards—former Tax Foundation intern, Philadelphia native, and all-around great guy—just sent me some pictures of what this looks like on the ground in the city. Some observations (all photo credits to Bill):
A 12-pack of sports drinks is now more expensive than beer. Here’s a 12-pack of Propel energy water versus a 12-pack of Icehouse beer. Before sales taxes, 12 Propels is $5.99 plus $3.04 in soda taxes for a total of $9.03 (and that’s when it’s on sale for $1 less than the $6.99 standard). The 12 Icehouses are $7.99, beer tax included.
The tax on sweetened beverages is approaching the base price of the beverage in some instances. Here’s a picture of store-brand root beer, where the price of a 12-pack is $2.99, plus a beverage tax of $2.16. That’s a 73 percent excise tax. Taxes on 2-liter sodas are even higher percentages.
The “soda” tax is capturing a lot more drinks than just soda. Because of the overly broad statute language, the tax captures zero-calorie diet beverages, juice, and even milk substitutes for lactose-intolerant people."
"A new study at Downsizing Government looks at low-income housing aid. Howard Husock of the Manhattan Institute examines the history of federal aid and discusses problems with current policies, particularly rental subsidies and public housing.
One problem is that housing aid is costly to taxpayers. The federal
government spent $30 billion on rental subsidies (Section 8 vouchers)
and almost $6 billion on public housing in 2016.
Another problem is that housing aid and related rules are costly to
urban communities. Howard argues that federal interventions undermine
neighborhoods, encourage dependency, and create disincentives for
long-term maintenance and improvements in housing.
In urban politics, there are frequent calls for “affordable housing.”
But Howard says that it is a myth that markets cannot provide decent
housing for people at all income levels. He discusses the vast private
housing investment in the decades prior to the 1930s, which was a time
of rapid growth in America’s big cities.
The problem today is that government rules and regulations inflate
housing costs, which is the topic of an upcoming study by Cato’s housing
expert, Vanessa Calder.
What should Ben Carson do? The new Secretary of Housing and Urban
Development should heed Howard’s advice and work to cut federal
subsidies. Carson should also follow through on his conviction that HUD
imposes too many “social engineering” rules on local governments.
Vanessa provides further policy guidance for Carson here, and she discusses an example of the sort of top-down HUD mandate that should be on the chopping block here.
Howard’s vast scholarship on housing policy is here.
More information on HUD is here. I would particularly recommend HUD Scandals. My god, Ronald Reagan’s HUD was appalling."