PHILADELPHIA - City council members rejected a two-penny-per-ounce tax on sweetened drinks, Reuters reports. Philadelphia Mayor Michael Nutter proposed the soda tax in an effort to stem obesity and generate funds for the city.

The tax would have been applied to any sweetened drink, such as soda, energy beverages, iced tea, chocolate milk, and fountain drink syrup and powders (where the tax would have been based on number of liquid ounces produced). Exemptions included diet drinks without added sugar and baby formula.

Instead, the council approved several other measures, including a new fee for smokeless tobacco products.

Proponents of the tax claim that it would have generated $77 million annually for the city.

The mayor??s office will continue to push for adoption of the tax, probably at a lesser level, during the budget discussions prior to the final vote during the next fortnight.

Meanwhile, Dr Pepper Snapple Group CEO Larry Young told analysts last week that taxing soft drinks will not resolve the nation??s obesity problem. He instead pointed out that kids are often parked in front of electronic screens for hours at a time. "We??ve got to get them off their rumps," he said in an article in the Dallas Morning News.

Young said that while various sin tax proponents push the supposed link between soda consumption and obesity, carbonated soft drink sales are flat or dropping and obesity numbers are rising.