New York Governor Proposes Soda Tax as Budget Stopgap
New York Governor David Paterson (D) has reportedly proposed an 18 percent tax on soft drinks and other non-diet sweetened beverages as
part of his plan to lessen a $1.5 billion shortfall in the state’s annual budget. The tax would purportedly raise $404 million, but industry leaders have called the maneuver a “money grab” that would hurt union jobs at major bottlers located in the state. “We think that everybody has to keep in mind that we’re in a recession, and in an economy like this, the last thing we should be doing is raising taxes on everyday needs like clothing and groceries. That doesn’t wash with the consumer,” an American Beverage Association spokesperson was quoted as
saying. See Times Union, December 14, 2008; Advertising Age, December 15, 2008.
Meanwhile, a recent New York Times op-ed column hails the proposal as a “landmark effort that, if other states follow, could help make us
healthier.” Times writer Nicholas Kristof compares the soda tax to similar levies on cigarettes, citing claims made in the 2005 book Prescription for a Healthy Nation that “[e]very 10 percent increase on cigarettes reduced sales by about 3 percent overall, and 7 percent among teenagers.” Kristof also contends that “sugary drinks are a major contributor to obesity” because “liquid calories don’t register
with the body,” which has evolved not “to feel full when water was sloshing around our stomachs.” “These days, sugary drinks are to American health roughly what tobacco was a generation ago,” he concludes. “A tax would shift some consumers, especially kids, to diet drinks and water.” See The New York Times, December 18, 2008.
