Soda, the new sin tax?

Philadelphia City Council members approved a 1.5 cent-per-ounce citywide tax on soda Thursday, making it the first major American city to pass the tax. The measure passed despite a multimillion-dollar campaign by the beverage industry to block it.

Critics both within the City Council and outside argue the tax is regressive and will largely burden the poor—similar to grocery taxes—because the poor are more likely to consume sugary drinks. Philadelphia has a 26 percent poverty rate, the highest of America’s largest cities, NPR reports.

The American Beverage Association was a part of the ad campaign to stop the tax, saying it is “discriminatory” against the poor and will cost consumers.

The Philadelphia tax will largely fall on distributors. If distributors pass the cost on to consumers, the price of a 12-ounce can of soda will go up 18 cents. A six-pack of 16-ounce bottles will go up $1.44. The tax is set to go into effect Jan. 1, 2017.

In the past, soda tax campaigns have focused on reducing the negative health consequences of consuming sugary drinks. But Philadelphia’s campaign promoted sugary drinks as an untapped source of tax revenue to fund education programs.

The tax, which passed 13-4, was a victory for Democratic Mayor Jim Kenney, who developed the policy as a way to pay for pre-K education, community schools, and recreation centers. He told council members he believed the tax could generate up to $400 million in the next five years.

Harold Honickman, chairman of the Honickman bottling company, said he plans to fight the tax in court because the tax will cause a loss of sales and jobs within the beverage industry.

Soda tax proposals have failed in more than 30 cities and states in recent years, including twice before in Philadelphia. Only Berkeley, Calif., has a similar law.

Any positive health effects the tax has would be a bonus, Kenney said. In Philadelphia, more than 68 percent of adults and 41 percent of children are overweight or obese.

Former New York City Mayor Michael Bloomberg funded ads in Philadelphia supporting the soda tax. In 2014, Bloomberg had his own controversial ban on large-size sugary beverages that a judge later overturned.

The New York Times reported that soda-tax policies are becoming popular on the international stage because of budgetary needs and governments’ beliefs in ensuring citizen health. Countries in Europe, Asia, and South America—as well as South Africa, the only African nation so far—are all considering their own soda taxes.