This Isn't a Fizzy Lifting Drink; It's Another Tax Grab

New York politicians continue to pursue the old bait and switch on taxes. Some want to impose a tax on carbonated beverages so that they can claim that a portion of the revenue raised will go to property tax relief. (HT: Simon K.)

"It's a small amount of money, as far as increasing the price of soda, and it would allow the governor and the state to have a new slogan for soda: 'Have a coke, a rebate check and a smile,'" said state Sen. Jeff Klein (D-Bronx) who unveiled the plan yesterday.

Klein said the soda tax would generate $100 million annually, with 80% of the money dedicated toward reviving the state's $1.5 billion STAR Property Tax Rebate program.

The remaining 20% would fund youth recreation programs aimed at cutting obesity rates.

The STAR rebate program was cut from this year's budget because of the state's fiscal crisis.

The Senate's soda tax is similar to one proposed by Gov. Paterson in December that met heavy resistance from bottlers and retailers.

Paterson and state lawmakers later agreed to use $1.3 billion in stimulus money to remove that and a host of other nuisance taxes from the budget.

Paterson reacted coldly to the revived plan, saying it does not provide enough money to fund their tax relief proposals.

Read more: http://www.nydailynews.com/news/2009/05/19/2009-05-19_state_lawmakers_want_a_penny_for_your_soda_new_riff_on_fat_tax_will_charge_penny.html#ixzz0G3eUhCNU&B

What Gov. Paterson is really saying is that Klein and the other soda tax proponents need to increase the amount of taxes coming from their plan, or else it isn't worth the political fight. I suspect that the soda taxers will suggest a nickel or dime tax per bottle, which they'll claim would raise revenues anywhere from $500 million to $1 billion annually. Never mind that Coca Cola and Pepsi (whose corporate headquarters is in New York) would lose revenues and potentially shed employees as people shy away from spending on soda.

New Jersey has a similar property tax relief scam, where they imposed a sales tax hike to cover property tax relief, which is all but being axed because the state needs the sales tax revenue to cover general obligations, and not the property tax relief.

Once these taxes are implemented, the money disappears into the maw of government spending, never to be seen again for its intended purposes. New Jersey imposed a personal income tax to provide property tax relief, but now New Jersey taxpayers need tax relief from the personal income tax since the rates are about to go much higher on those making over $400,000 (and quite possibly those making much less than that), and property taxes are soaring all while the sales tax keeps churning along with the increase with no benefit to homeowners.

It's a bait and switch, and the politicians are not being held responsible for this mess.