Philly Soda Tax Leads to Creation of Black Market

Sometimes we who dare dream of alternative governance to the coercive enterprise model like to speculate as to whether it’s a good or bad thing when the state passes a new round of more controlling laws aimed at the market.
It might seem contradictory to speculate that bad laws can produce good, liberty-building results, but that’s the case in Philadelphia. The New Puritans of the Progressive Statist Left determined that people were too fat, and soda was a major culprit. They wanted to ‘encourage’ people to buy less soda by passing a soda tax, designed to drive up the cost of the soda. It was a win-win, they thought. They get the revenues from the tax (and what coercive enterprise busy-body New Puritan doesn’t want more revenues) AND they get to discourage people from buying sodas.
They save the planet, they save people, and they help to pay themselves and their allies through ‘revenue.’
But something happened on the way to that perfect win-win fantasy, reality. Reality smacked the New Puritans square in the mouth in the form of the black market. It seems that people don’t want to pay the extra price so they’re doing what any sensible person would, they’re buying soda from outside of the city. And now, at least in Philly, “soda smuggling” is a thing. That’s right, you are now a criminal in Philadelphia if you take soda into the city that was not purchased in the city.
Entrepreneurs are smuggling soda in the city and selling it a slight mark-up to people who are still paying less than they would if they bought it through the state-controlled market. Instead, they’re turning to the liberty market, as I like to call it.
The activity is sure to reinforce in some the unnecessary and burdensome nature of the coercive enterprise model. Without the state, who would create a soda smuggler?


Philly Tax Spurs Black Market Soda Smuggling

Philadelphia’s soda tax has produced a peculiar but predictable outcome: a thriving black market in soda imports.

On March 1, Mayor Jim Kenney released a budget proposal that cut revenue projections for the city’s 1.5 cent tax on soda from an originally estimated $92.4 million to $78 million, a drop of nearly 15 percent.

Danny Price—the secretary-treasurer of Teamsters Local 830, which represents soda bottlers and delivery drivers—attributes a good chunk of that lost revenue to black-marketeers carting in soda from untaxed jurisdictions.

“People are going out of Philadelphia, to Delaware, New Jersey, and the surrounding counties, and they’re bringing back soda,” Price tells Reason, adding that he and his union’s members spot vans loaded with soda coming into the city every day. The soda is then sold to local businesses looking to skirt the city’s tax.

The result, says Price, is less money for the city and less work for his union’s members. “Our delivery drivers bid on an area and that’s their area. If people are buying on the black market, our guys lose.”

A similar phenomenon has been reported by Vince Cicione, of Cicione Beverage, a small Philadelphia distributor of beer and soft drinks. Since the soda tax was implemented in January of last year, he says, his business has seen a moderate drop in soda sales.

“When a customer comes in the store, you tell them the price, and they walk right out,” says Cicione, who says that soda smuggling is “very common.”

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Paul Gordon is the publisher and editor of iState.TV. He has published and edited newspapers, poetry magazines and online weekly magazines. He is the director of Social Cognito, an SEO/Web Marketing Company. You can reach Paul at

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