Tuesday, May 25, 2010

Great Tax, Less Filling?

Gov Modifies Soda Tax Proposal

Maybe there's less corn starch in Governor Paterson's modified sweetened beverage tax, but will the public buy it?

They should.

The State needs to raise billions, so millions in new tax revenues on soda and other highly sweetened beverages -- which all of us should do without, but won't -- would be a palatable source of revenue.

And the elimination of the sales tax on bottled water and low-sugar beverages? An added bonus, sure to leave a great taste in the mouths of New Yorkers.

No, it's no just about public health, or that soda-belly you've got going there. It's about dollars and cents.

In this instance, the nonsensical ads (and millions spent) by the beverage industry aside, it's about dollars and sense.

If you still want to drink soda and highly-sweetened beverages, you pay the tax. If paying the tax would keep food off the table or send you into foreclosure, well, you shouldn't be drinking soda in the first place.

Drink water! Healthier for you, and soon, should the modified soda tax pass muster, less expensive.
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From Governor David Paterson:

My Fellow New Yorkers:

Obesity is a public health crisis. When over half the adults in this State, and one out of every four New Yorkers under the age of 18, are overweight or obese, we must recognize that there is a tremendous problem. Obesity is associated with life threatening conditions such as heart disease, diabetes, high blood pressure and cancer, and the consumption of sugar sweetened beverages is a major contributor to obesity. These health problems and costs will only increase in the future, unless we take steps to help all New Yorkers adopt healthier lifestyles.

By implementing my modified sugar-sweetened beverage tax, we will gain an effective tool to combat obesity. This plan will increase the price differential between the high sugar-high calorie and low sugar-low calorie beverages and encourage consumers to make healthier choices. A one cent per ounce excise tax would be added to sugary soft-drinks, bottled coffee and tea drinks with added sugar, powders and other sugary beverages, but my revised and improved plan will also eliminate the sales tax for bottled water and low-calorie drinks that have 10 or fewer calories per 8 oz.

New Yorkers spend an estimated $7.6 billion annually to treat obesity related health care costs. This initiative will help lower those costs over time, and improve the health and quality of life for all New Yorkers. Now is the time for us to take bold actions, and I again urge the Legislature to help me encourage healthy eating by approving this new tax on sugar sweetened beverages.

For more information about the modified sugar sweetened beverage tax package, please click here. Also, please share your views on this issue on Straight Talk from the Taxpayer.

David A. Paterson
Governor of New York State


  1. I'll offer the cranky, contrarian counterview to this. I've never been a big fan of using tax policy as a means of social engineering. The law of unintended consequences almost always rears its ugly head, particularly as this relates to undesirable economic outcomes. My concern with this tax is that while it may indeed motivate some people to change their drink preferences, it will also result in an overall reduction in sales of soft drinks. There's rarely a sale tax that's ever been enacted that hasn't resulted in a demand decline. Meanwhile, a disproportionate amount of soft drink sales take place in convenience stores, delicatessans, bodegas, and the like - in other words, small businesses that are already feeling more than their share of pain. Remember these are the guys who are supposed to be the engine of job growth in any economy - and God knows we need jobs. That's not going to happen if they continue to see their sales decline.

  2. Citizens too fat? Tax soda. Citizens are now poorer and still too fat. I agree this is not about fighting obesity. It's a lot closer to taxing tea.

    Cartoon: For Your Own Good

  3. QA,

    an excellent post. but what no one seems to realize that this is basically a smokescreen-to distract us from the real issues at hand;issues that are not being addressed in any way,shape or form.

    if there has to be a tax,why just soda? why not on junk like hi-c, or fast food? arent they far more harmful than regular coke or pepsi?

    in the end those in the middle and the bottom take it on the chin-as always.

  4. Okay. So you don't want to tax soda, or anything else for that matter.

    As the previous blogpost asked, what do you really want Albany -- or any of our elected officials -- to do?

    Don't tax. Don't Cut. Don't spend. Don't get us anywhere.

    How about some positive, viable suggestions from the peanut gallery, rather than only complaints?

  5. Start taxing on my grandpa’s Ensure. No lie, check the ingredients http://ensure.com/products/ensure. A sugared beverage means taxed beverage! Then mix in complaints about no being able to pay off his cronies with my money by his boss. Commissioner Daines isn’t defending a government health policy but a public fleecing initiative.

    Constructive comment... How about bringing green/farmer markets to the inner city poor? Support the NY farmer and the working class poor.