Following in the footsteps of Alabama and countries like the UK, the state of New York is considering imposing a so-called “fat tax.” While each municipality is a little different, the New York proposal would slap an 18% tax on sodas and sugar-filled drinks which contain less than 70% real fruit juice.
The official position on the “fat tax” is to discourage consumption of high-caloried drinks. The government projects a 5% drop in the number of sugary drinks that New Yorkers drink.
But you and I know what this is really about: money.
While sin taxes have been imposed or proposed on a number of items that are said to be bad for you – cigarettes, alcohol and in some states, porn – ostensibly to curb the behavior, these taxes have generally not resulted in dramatic changes. Folks still smoke, drink and yep, look at porn.
What Governor Paterson is really hoping to do is close a gaping hole in the budget: according to the Governor, the new tax will raise almost half a billion dollars in 2010-2011. In a tight economy, taxpayers will howl at the idea of raising personal or property taxes. Taxpayers are far less vocal about a tax on items that health officials have already labeled as bad for you.
Not surprisingly, the American Beverage Association opposes the tax, arguing that it doesn’t make sense to target sodas and sugary drinks as a primary cause for obesity. I would actually agree. If you’re going to make a policy statement about health, then make it across the board. Of course, that would never fly. Can you even imagine a surtax on chocolate?