ABA calls NY tax a ‘money grab’

WASHINGTON, Jan. 7 /PRNewswire-USNewswire/ — In response to Governor Paterson’s proposed sales tax on beverages, as mentioned in his State of the State Address, Susan Neely, president and CEO of the American Beverage Association (ABA), said that the so-called “obesity tax” is simply a money grab that will raise taxes on middle class families and threaten thousands of jobs across New York State.

It’s disappointing that just two days after President-elect Obama told the nation that our economy is “very sick” and is “getting worse,” Gov. Paterson continues to support sweeping and regressive tax hikes on New York families. In an economy like this, the last thing government should be doing is raising taxes on hardworking families.

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 percent sales tax on dozens of non-alcoholic beverages that New Yorkers drink every day. This tax is a regressive tax that will hurt most those least able to pay.

And while Gov. Paterson laments job losses across the Empire State, his tax hike on beverages will raise costs and threaten thousands of good-paying jobs with health benefits all over New York. New York-based employers will be at a tremendous disadvantage with their counterparts in neighboring states. A significant percentage of sales will simply be lost, as New York consumers cross the border to buy their beverages — and other groceries, clothes, and consumer goods — in other states.

The proposed sales tax on beverages to fight obesity is simply a facade for raising taxes. It’s a pure money grab from hardworking families who have no more money left to give. Singling out one particular product for taxation won’t even make a dent in a problem as complex as obesity. If we are serious about combating obesity we need to comprehensively address the consumption of all foods and beverages and get more physically active as a society. It’s unfortunate that some are perpetuating the myth that taxing one product will make a difference in obesity. It won’t.

We appreciate the budget challenges facing the state. And we look forward to working with the Governor and lawmakers on solutions that don’t add to the burden of the people of New York during these tough economic times.