Monday, April 12, 2010

Gov. Paterson and NY Legislators Still Promoting Tax On Sugared Beverages

Call it a tax on carbonated beverages or sugared beverages or even a soda tax, but the brunt of the proposed tax will actually fall on those who buy powdered drink mixes like ice tea or lemonade. Because the tax is based on a per-ounce measure, those powdered drinks may be taxed at a rate comparable to tobacco products.

Think I'm joking, just take a gander at what the New York tobacco products tax and the proposed tax rate on powdered drinks:
If the tax were approved, consumers could expect the price of a 2-liter bottle of soda to rise about 67 cents.

However, the cost of a typical canister of powdered lemonade, which can produce as much as three gallons of summer refreshment for a thrifty $4.19, would jump by $3.84.

The estimated shelf price of $8.03 would be 48 percent tax -- a rate to rival tobacco products -- even though some drink-mix brands advertise substantially less sugar than soda.
The current excise tax on tobacco products in New York is 46% of the wholesale price. So, the tax on these products would be nearly half the price of the product itself, and the tax rate would be nearly as high as a truly toxic material that states want to tax for the revenues, but not so much as to eliminate the revenues entirely.

This is yet another tax grab that will hit families that are looking to save money as powdered drinks typically cost less than other beverage products. It's being proposed in the name of reducing obesity, but the state and city have their eye on the tax revenues, not the waist lines of their constituents - let alone their pocketbooks.

The State Health Commissioner claims that this will help reduce obesity, even though other states' experience with soda taxes have been anything but exemplary. West Virginia has a soda tax, and yet it has one of the worst obesity rates in the nation (as recently expounded upon in a television program starring British chef Jamie Oliver who complains about the food choices for kids in school).

It isn't about the soda consumption or beverage choices, but parents and children who are old enough to make informed and reasonable food choices - portion control and opting for healthier options.

The soda tax is a tax grab wrapped in a moniker of doing something about health, but the purpose is to gain revenue for a state that needs the money to balance the state budget. It also isn't the only effort in the state legislature to increase the costs of such products.

This is the actual text of the bill, which would impose excise tax on manufacturers, distributors or wholesalers:
(A) Ten dollars per gallon for each gallon of soft drink syrup or simple syrup sold or offered for sale in the state;
(B) One dollar and fifty cents per gallon for each gallon of bottled soft drinks sold or offered for sale in the state; or

(C) One dollar and fifty cents for each gallon of soft drink which may be produced from each package or container by following the manufacturer's directions in the case in which a package or container of powder or other base product other than a syrup or simple syrup is sold or offered for sale in the state. This excise tax applies when the sale of the powder or other base is sold to a retailer for sale to the ultimate consumer after the liquid soft drink is produced by the retailer.
There are certain exemptions for infant formula and certain other beverages, but on the whole, this is a tax that will be passed on to the consumer.

A separate bill would increase the sales tax by .25% on all food and beverages currently subject to sales tax to fund an obesity program. A separate tax increase would be imposed on certain beverages and snacks and would also increase the sales and use tax on video games, videos, and software, in the claimed pursuit of reducing obesity rates in the state.

Meanwhile, the State Assembly is considering legislation that would ban sugared beverages, candies, and other food items of "minimal nutritional value" from schools.

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