Monday, January 25, 2010

Artificial Budget Sweetener

Governor Paterson is at it again with another so-called fat tax-and in all likelihood, just as last year, he's headed for disappointment. This isn't a year for a soda tax, a cigarette tax, or any kind of tax. But it certainly isn't a good time for another particularly regressive tax that will fall on the folks in the state's lower income brackets.

Some of this is brought home in a City Room post last week-a story that highlights our good friend Nelson Eusebio and his anti-beverage tax coalition: "Mr. Eusebio wears two hats, both firmly cocked against the soft-drink tax. He is the chairman of New Yorkers Against Unfair Taxes, which describes itself as a coalition that opposes “unfair and misdirected beverage tax increases.” Its members include soft-drink bottling companies, vending machine trade groups and supermarket chains. He is also the executive director of the National Supermarket Association, which represents more than 400 supermarkets in New York, New Jersey and Connecticut."

Eusebio points out how this kind of tax has a negative ripple effect throughout the beverage distribution system: "While the governor is taking aim at obesity caused by sugary drinks, Mr. Eusebio worries that the proposed tax would slim down the beverage industry, which he said pays $6.7 billion in wages statewide and generates billions more for the economy."

From the manufacturer, to the advertiser, to the route driver, right down to the bodega on the corner-but these kinds of cold realities don't penetrate the minds of some-like Times editorial writers, as well as the governor-who have little appreciation or understanding of how business works; and how the fact that it does so, has benefits that many are able to partake in.

And then there is the law of unintended consequences-and how a soda tax would push the price of the product higher than low priced beer: "“A six-pack of soda is going to cost you approximately $4.99” if the penny-an-ounce tax goes through, Mr. Eusebio said, “where you can pick up beer from $2.99 to $3.99.” Off to the neighborhood supermarket, where it turned out that Mr. Eusebio’s math was not far off. With the tax, a six-pack of Coca-Cola or Pepsi would cost 2 cents more than a six-pack of the cheapest beer in the store."

All of this frankly turns our stomachs. The governor is trying to posture as a man concerned with the health of our children while he simultaneously picks their pockets; and those of their parents and the local neighborhood stores that are simply struggling to survive. All of this comes along with the demonization of an entire industry-with those failing twin enterprises, the Boston Globe and the NY Times leading the way.

As the Globe opined last year-conflating correlation with causation and citing no less a health authority than the president: "Obama said. “And every study that’s been done about obesity shows that there is a high correlation between increased soda consumption and obesity.’’ Sure, along with everything else under the sun-including potato chips, Twinkies, fast food, and ice cream.

Pardon us for being skeptical of Dr. Obama-and the equivalency game between soda and tobacco is simply tendentious. As one critic of the soda tax points out-critiquing the genius of the Times' Nicholas Kristoff: "Kristof is also way off base in his effort to liken non-diet soft drinks to tobacco. “These days,” Kristof asserts, “sugary drinks are to American health roughly what tobacco was a generation ago.” Kristof then quotes long-time food nanny Barry Popkin, who says, “Soft drinks are linked to diabetes and obesity in the way that tobacco is to lung cancer.” As this column has pointed out before, there simply is no scientific basis for concluding that non-diet drinks cause obesity or diabetes. The National Academy of Sciences concluded in 2002 that, “There is no clear and consistent association between increased intake of added sugars and [body weight].” And this remains true today."

And, of course, the nannies will not be dissuaded by evidence, nor will they simply park their health intrusion truck in the long term soda lot. Not when there is so much else left to regulate.

We're all for educating people to live better lives-but government tax policies that punish certain products and industries are not the right way to go. Maybe our governor should try to stick to economic development policies that promote job growth, and leave the health hectoring to our well meaning spouses and significant others-a category he will soon find out, from New Yorkers at least, that he is permanently excluded from.