New York Governor proposes tax on non-diet soft drinks

Posted by James Ferre on 18th December 2008

An anticipated US$13.7 billion deficit for New York in 2009/10 has potentially paved the way for a tax on non-diet soft drinks in the region.

New York Governor David Paterson has announced that he intends to place an 18 per cent sales tax on ‘non-diet’ soft drinks “to combat obesity and related diseases”, with the funds raised directed to healthcare. There have been other states in the US which have placed a tax on soft drinks and/or confectionery, but New York will be the first to distinguish between diet and non-diet alternatives. And distinguishing will prove more challenging than just looking at a can and seeing the word “diet”.

There has been a number of new laws passed in US states this year in response to growing obesity levels, with calorie counts on menus, bans on new fast food restaurants in specified regions and the phase out of trans fats. However, the move by New York has been labelled as “misguided” by the American Beverage Association (ABA). They are no doubt aggrieved that soft drinks have been blamed for obesity – it does appear strange to single out soft drinks as the primary culprit for the increased rates of obesity.

“It imposes an astounding 18 percent sales tax on regular soft drinks and juice drinks – a regressive tax that will hurt most those least able to pay,” the ABA noted. “The proposed sales tax on regular soft drinks is simply a façade for raising taxes. Singling out one particular product for taxation won’t even make a dent in a problem as complex as obesity. This point is supported by science as well as common sense. If we want to be serious about battling obesity, we need to comprehensively address the consumption of all foods and beverages in moderation and get more active as a society.”