A few weeks ago, I wrote about New York Gov. David Paterson's efforts to add a penny-per-ounce tax on sugared beverages in order to help close a Department of Health budget gap and to curb obesity. That effort faces an uphill battle among residents, according to local polls. It also was not a part of the budget put forward by Senate Democrats last month.
It's too bad, since the Associated Press reported on a study yesterday that a high tax could result in reduced consumption. Part of the problem with the perception of this tax is that, since lower-income families spend more of their money on groceries, the tax will affect a higher percentage of their income than it will for upper income families. That leads to an almost automatic response from the left that says regressive taxes are bad. But that assumes lower-income families won't substitute something else, or just stop buying soda. I doubt we'll see families struggling to earn more and going without other goods just to continue buying two cans of soda a day, which is what the average teenager drinks.
If lower-income families are drinking a lot of soda, it's only because it's disproportionately cheap compared with healthier foods and drinks. That is the result of national policies that could use some fixing, too, but unwinding those policies might prove a long, complicated and politically unpopular task. Local efforts to raise the price of sugared beverages are faster, and raise revenue. Plus, lower-income families reap a disproportionate amount of the true costs in higher obesity rates and lower levels of health. That's why New York state's plan was so good. It would have put the tax money back into the Department of Health, which provides health care to lower-income families. It's the progressivity of the overall system that matters, and that's why it's disappointing when we focus too much on one tax.
-- Monica Potts
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