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Tax has health benefits
Updated: August 21, 2010, 9:53 AM
State legislators should think long and hard about eliminating the governor's proposed
penny-per-ounce excise tax on sugary beverages, because if they do ... a likely scenario ... they
will eliminate a hefty chunk of revenue that will have to be offset elsewhere in the budget.
New taxes are not a good idea in a high-tax state like New York. But a use tax on a
commodity that's not a necessity is not a blanket penalty, and this one carries health
benefits to boot.
The proposed tax on sugary beverages has drawn support as a step toward reducing
consumption and, eventually, combating obesity, especially among the young. That would pay
dividends in the long run by curtailing needed health care, curbing diabetes and saving lives.
Health Commissioner Richard Daines has been among those promoting this proposal, and
talking to members of the State Legislature in particular about the health benefits and the
need to identify another $1 billion in budget cuts if this idea is defeated. During these
fiscally difficult times, that warning should gain some traction ... but lawmakers also are
worried about a new tax when voters already are angry about state government and an inept and
inert governing body.
Daines, though, points out that 60 percent of adults and 30 percent of children in New York
are overweight, with obesity driving up health care costs and reducing productivity while also
demanding higher insurance premiums and taxes for treatment. According to Daines, New Yorkers
pay 80 percent of the $8 billion in annual obesity-related health care costs for Medicaid and
Medicare, and the remainder in health insurance premiums.
He hopes the $1 billion a year raised by the tax will support critical health care services
and prevent deeper cuts at a time when the state has to close a $9 billion deficit.
The issue is rooted in a shift nearly 30 years ago from sugars to high-fructose corn syrup as
a beverage sweetener. The syrup, which came from government-subsidized corn crops, was far
cheaper and, over the years, sweetened-beverage prices increased far less than the prices of
other foods. Consumers saw them as economical and bought more, encouraging producers not only
to make sweeter beverages, but to increase bottle sizes. The evidence for that is in every
supermarket now.
Proponents say the excise tax will help close the gap between healthier foods and sugary
beverages with artificially low prices, eventually encouraging healthier choices. That should
have an effect on the main argument now used against the tax, too ... that higher prices will
cost beverage-industry jobs. Expanding the market for healthier beverages can make that a
shift, not a just a loss.
Most of us understand, at least on an intellectual level, that Americans have grown fatter.
As we're slurping the latest, greatest and largest drinks at movie theaters and convenience
stores, we should consider that more than one in six U.S. children is obese, three times the
rate in the 1970s ... and that obesity is a major contributor to cardiovascular disease,
according to recent studies. Higher rates of Type II diabetes over the past two decades also
can be linked to higher rates of obesity, with young people now accounting for almost half of
the new cases in some communities.
It's no secret that low-income communities are most affected by the cost-and-consumption
issue. Sugary soft drinks are available in abundance at neighborhood convenience stores and
cost less than fresh fruit and vegetables, thanks to sales tax exemptions for soda and snack
food in many states and to corn subsidies for farmers. The poor have little choice but to buy
cheaper stuff, and buy empty calories in the process. That's costly to them, and costly to
society. Communities must do what they can to decrease the price and increase the availability
of healthier foods and beverages, but from a health standpoint, let alone a state-revenue one,
adjusting the price disparity to close the gap makes sense, too.
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