ABA Denounces Proposed Obesity Tax

The American Beverage Association voiced its objection to Gov. David Paterson’s proposed “obesity tax” for New York earlier this week, calling the move “a money grab that will raise taxes on middle class families and threaten thousands of jobs across New York State.”

WASHINGTON — The American Beverage Association here voiced its objection to Gov. David Paterson’s proposed “obesity tax” for New York earlier this week, calling the move “a money grab that will raise taxes on middle class families and threaten thousands of jobs across New York State.” If passed, an additional 18% sales tax would be placed on non-diet sodas and fruit drinks containing less than 70% natural fruit juice.

The measure is designed to discourage consumption of beverages that contribute to obesity. Revenues from the measure, estimated at around $404 million a year, would be dedicated to health care programs.

“New York State spends $6.1 billion each year to treat obesity-related health problems, and one out of every four New Yorkers under 18 is obese,” said Paterson in his state of the state address earlier this week. He estimates that the tax will reduce consumption by 5%.

“The Governor has proposed tax hikes on an array of consumer goods that families buy regularly at their local grocery and department stores, including an astounding 18% sales tax on dozens of non-alcoholic beverages that New Yorkers drink every day,” said Susan Neely, president and chief executive officer of the ABA, in a statement.

“This tax is a regressive tax that will hurt most those least able to pay.” Liz Morrill, founder and CEO of Fizzy Lizzy, said that Fizzy Lizzy Tangerine, which contains 50% juice and 50% seltzer water, would be subject to the tax. “Oddly, almost all non-carbonated beverages, without regard to nutritional profile, get a pass,” she said in a statement. “Instead of mindlessly demonizing carbonation, the tax, if any, should be based upon objective nutritional criteria such as calories and sugars per ounce.”

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