The article certainly explains that while the "fee" is designed to address health concerns, it actually puts more of the collected "fees" into administrative costs such as hiring more "fee" collectors.
That's because the more taxes you charge, on more specific things, the less efficient taxing becomes.
I remember reading that, at least before fast-pass systems dominated, the cost of running toll operations often exceeded 50% of collections, meaning that more of the money you paid went towards making you pay money than maintaining the road or bridge the toll was intended to fund, making it an extremely inefficient means of funding infrastructure.
That said, they did close the biggest loophole by making it so that retailers transporting their own syrup boxes would still be taxed by considering them distributors (really, I buy half a dozen boxes of syrup for my own store/restaurant and I'm a distributor?).
They're trying the same 'hide it from the customers' by charging the tax to the distributors, and missing the same deal that while the tax isn't that big of a deal if you're buying the smallest sizes single-serve(which has the highest profit margins), there's no way in hell that
bulk soda purchasers aren't going to see a 50% or more increase in price.
But then left a lot more loopholes open for customers. Especially the small sales deal.
I figure that:
1. This will
cost them money, because as MillCreek says, people will shop outside of the city limits instead, and once they're doing that, they'll avoid other city taxes as well buy buying in bulk as long as they're there. Revenues will be no where near what was expected.
2. Evasion is going to be rampant, given that they left more loopholes open. I figure on a number of methods.
a. Blended 100% fruit juices are now cheaper than soda. Not really any better for you, but cheaper. I wonder if carbonated still counts as 100%? You might be able to come very close with the
right 100% fruit juices if you get tricky. I'm sure there's some 'fruit' that is close to 100% sugar if you squeeze it right. What about V8, liquid vegetables, not fruit?
b. Return of the soda shops. You know, tiny joints that mix their own? They have an exemption.
c. Chocolate milk and such. That might be healthier, might not.
d. diet sodas are now substantially cheaper.
e. For gatorade type drinks, those pouches where you buy a bottled water then empty a powder into them. As far as I know, the powders aren't taxed.
f. For things like sweet tea, I can see them switching to you buying unsweet and getting a pouch/baggie of sugar if you want it sweeter.
