 Hi, I'm James. And I'm Anthony. And this is Words and Numbers. Today we're sitting here thinking about taxation, as we so often do. And the reason why we get to this today is because we wrote a recent article, the link will be below, about the soda tax, the recent soda tax that Mayor Kenny foisted upon the city of Philadelphia. Which got a lot of hate mail, by the way. Yeah, no, I always like getting hate mail from the nice people in Philadelphia. The Philippines, for whatever the reason, send us more hate mail than all other sources combined. They love us, James. Yeah, I think that's exactly incorrect. But hard to see why they don't love us this time. Because what we pointed out was that the city of Philadelphia can, in fact, levy a tax on soda. But the kicker here was that they decided to tax business. And this is always something that politicians like to do, because it sounds so good, right? We're going to make the evil businesses pay the taxes, and the people somehow will be off the hook for this. And by the way, the nice thing about doing that is you now set the people against the businesses so the politicians can go about doing what they're doing without anybody getting on their backs. Yeah, nothing, nothing new there. It's a standard divide and conquer policy. But, you know, soda seems like pretty low stakes. And of course it is you can choose not to drink soda if you don't want to pay the tax. But the simple fact of the matter is, is politicians levy the tax, fully expecting business to absorb the entire cost. And that just never happens. Yeah, I would go further than that, because what they'll tell you is they expect businesses to absorb the entire cost. It can't be the case, certainly, that politicians don't know what's going on. You cannot tell me that nobody in the legislature has ever picked up an economics 101 textbook. You know, every single textbook will tell you when you impose a tax on a product, the tax gets shared between the consumer and the seller. And even on the seller's side, the seller is going to further pass that tax on either by paying his employees less or ultimately giving less of a return to his investors. So no matter how you slice it, the money that the business comes up with to pay the tax comes out of people's pockets. The question is who? Is it the consumer? Is it the worker? Is it the investor? Is it a combination of all three? Well, you know, the politicians don't exactly care, not exactly who pays it. They care about who appears to pay it. And in Philadelphia, the big problem was that business owners taking all kinds of criticism from their customers started putting signs up saying, we're sorry, we can't help it. Right, right. This is a giant tax and it's got to be passed on. And that's just it, right? Taxes are passed on. And there's just no way around that. And you see this, so we're talking about soda, right? And you can ask, well, you know, who cares about soda? You know, it's a low price thing. But, you know, all the states do this. They'll put tax on gasoline. And many of them, Pennsylvania most recently, we went through by the way in Pennsylvania, over the past three years, three successive increases in the state tax on gasoline, we now have the highest at about 50 cents per gallon, the highest tax on gasoline in the country. And of course, what politicians did is the same thing they're doing with the soda. They said, well, we're not going to tax the people, we're going to tax the oil companies. Well, guess what? The oil companies pass that tax on to the people in the former higher prices. So it's the people who end up paying. Well, yeah, but let's even make it more explicit. The state of Pennsylvania makes, what, five times what the oil companies make every gallon of gas that gets sold. So that's beautiful, right? You work down the figures and it's something like for every gallon of gas you buy in Pennsylvania, basically a buck 40 goes to the oil companies, but that's sales. That's not profit. The profit on that is something in the neighborhood of 10 cents, 20 cents, something like that. But when all the dust settles, the state of Pennsylvania actually is taking the largest chunk out of the dollar you spend on gasoline. About six times what the oil company takes. Who's the greedy profiteer here? And the answer is almost always the government, you know, whether it's the local government like we have in Philadelphia, the state government like we've got in Pennsylvania, or the federal government, which is starting to be an issue now with all of Trump's talk of tariffs that he wants to slap on various countries that he doesn't exactly care for, Mexico, chief among them right now. Who do you think is going to pay? Yeah, so this principle applies all the way from, you know, purchasing soda in Philadelphia up to importing things from Mexico, you know, the rhetoric that while the Mexicans are going to pay because of tax on imports is just false. The consumer is going to pay it. Yeah, that's nonsense of the highest order. And if you look at the list of cars for just to pick one thing out of the air that comes out of the car automobiles that come out of Mexico, there's I think a list of 20, 30 different models that come out of Mexico, all of which will now have tariffs. But it goes well beyond that, right? We're going to we're going to tax all the produce. We're going to tax every single product that comes out of Mexico into the United States, which will have the net effect of raising prices across the board on all these products, every single one. The moral of the story here is businesses don't pay taxes to government. They collect taxes for government. Yeah, that's right. The government is simply co opting business to go after their own customers at this point, right? I guess really what we're left with here is a very simple question. When government presents businesses as greedy, ask yourself some hard questions. Who's the greedy party here? And in the case of soda taxes at the local level, in the case of gas taxes at the state level, and in the case of tariffs at the federal level, it's always government reaching into your hand. They're just doing it by other means. The ultimate question for the voter is you're you're the one who's going to pay for the taxes. Do you want to pay for them directly? Or do you want to hand the money over to a business and have the business pay them for you? The taxpayer should know by now that no matter which avenue he walks down, he's going to pay. If you like this video, hit subscribe, or check out the foundation for economic education at fee.org.