New York Governor David Paterson is trying to close a record deficit of $15.4 billion with 137 new tax and fee increases, including a new tax on sugary sodas.
The so-called "obesity tax" is being touted as a way to not only generate extra revenue, but also improve the health of New Yorkers. Paterson does not propose to tax diet sodas, hoping that the new tax will encourage more New Yorkers to switch to Diet Coke, Diet Pepsi and other artificially sweetened alternatives.
On the other hand, some studies have suggested that diet sodas only contribute to the obesity epidemic by not satisfying the body's craving for sugar. Researchers at Purdue University have found that laboratory rats that ate yogurt sweetened with saccharin consumed more calories and gained more weight and body fat than rats who ate yogurt sweetened with sugar. They surmised that the artificial sweeteners disrupted the body's ability to count calories based on food sweetness.
As someone who usually opts for diet soda anyway, I don't mind the new tax proposal so much as I fight my own battle of the bulge. But it does seem like a backhanded way of trying to raise revenue while claiming to help the populace become healthier, much like cigarette taxes.
New York, like most other states, is suffering from a severe cash crunch this year. California, for example, has witnessed an ongoing battle between Governor Arnold Schwarzenegger and the legislature over the state's budget. California is facing a $42 billion shortfall and controller Johnny Chiang has warned that the state could run out of money in two months.
While the California governator has been hesitant to propose new taxes, he has ordered mass layoffs and two-day unpaid furloughs for many state employees starting in February. Compared to that, New York's $4 billion in proposed new taxes on sugared sodas, music and video downloads, fur coats, haircuts, luxury boats and other items may seem like small change.
But it may not be long before New Yorkers will also be faced with severe cuts in services and layoffs of state employees. Other states have also been issuing dire warnings about their finances while pleading for aid from Washington. Taxes could be going up around the country despite the recession. The soda tax isn't likely to fill state coffers very much, or trim waistlines either.
Let's hope that next year, the economy improves. In the meantime, happy holidays.
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