It’s estimated that the soft drinks levy – to be added to regular sales tax – would raise $404m to help plug a record $13.7bn hole in the state budget for 2009/10. The cash would fund health programmes aimed against obesity.
However, Paterson told students at Morrisville State College in February that the tax was unlikely to reach the statute books. “I don’t think the legislature will pass it,” he said, after a student challenged him about the “foolish tax on soda”.
Even so, Paterson maintained that the proposed measure would still perform a valuable function by focusing public attention on the problem of obesity. “Often, publicity is as important as legislation,” he assured the audience, there to hear the governor give a speech on higher education.
Paterson’s reaction was welcomed by beverage manufacturers and retailers, as well as many soft drink consumers. But other American states are also looking at beverages to help solve their financial problems.
Governor Deval Patrick of Massachusetts, for instance, wants to expand the state’s existing $0.05 deposit law on carbonated beverage containers to include bottled water, juice and sports drinks. In 2007, only 66% of containers were returned by consumers, and the state received $39.2m in unclaimed nickels.
Patrick (who served as general counsel and executive vice president of The Coca-Cola Company from 2000 to 2004) said that extending the deposit system to still drinks would raise a further $20m, which could help pay for recycling and other waste management programmes.
California, Oregon, Vermont, Delaware, Maine and Hawaii already impose deposits on still as well as fizzy drinks. Now Iowa, Michigan and Connecticut are thinking of expanding their existing legislation, while New Mexico, Oklahoma, Indiana and Florida are considering the introduction of their first ‘bottle bills’.
The American Beverage Association maintains that deposits or special charges are not the best way to boost recycling or fight obesity. The association quotes a ‘nationwide’ survey by Rasmussen Reports, indicating that 70% of Americans oppose an obesity tax on non-diet soft drinks, while only 18% are in favour. An earlier poll by Connecticut’s Quinnipiac University found that 64% of New Yorkers are opposed to such a charge, with 32% in favour.
“Americans are making it clear that they have no appetite for taxing the everyday products they enjoy, especially in the middle of a recession,” said Kevin Keane, ABA senior vice president.
“As these surveys show, families aren’t buying the ploy of an obesity tax. People are seeing it for what it is: a pure money grab by politicians. And they’re offended that lawmakers would try to raise their taxes during such difficult times.”
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