Residents of the state of New York: Congratulations; you just dodged a bullet.

Photo courtesy of : √oхέƒx™|flickr

Last week, on March 11, New York Governor David Paterson and legislative leaders withdrew plans for a host of controversial and highly unpopular taxes that would have resulted in approximately $1.3 billion in new taxes for the year beginning July 1 .

Paterson suggested the state, which faces a record $14.2 billion deficit, could finally afford to drop the proposed taxes because of money the state will receive as part of the federal stimulus package.

Paterson first presented in December what some people thought is a unique plan to aid in closing the historic state budget gap. Others have called the plan “an attack on personal freedom.”

What the plan proposed was an addition to, or in some cases an expansion of, excise taxes, known popularly as sin taxes.

Paterson wanted the state to increase or add sales taxes to, among other items, sporting event tickets, movie tickets, theater tickets, alcohol (beer, wine and liquor), Internet downloads, taxis, satellite and cable TV, cigars, massages and soft drinks that contain sugar. (See more details of the original tax plan.)

And surprisingly, it’s that last one, sugar-laden soft drinks, that caused the largest outcry among New York’s citizens. San Fransisco considered a similar tax:



The $404 million the soda tax would have raised would be used to fund public health programs, including programs aimed at preventing or reducing the incidence of obesity.

"We are in the midst of a new public health epidemic: childhood obesity," Paterson said in December.



Paterson expected such a tax to reduce the sales of sugar-laden beverages by about 5 percent and the statistics he cited in making his proposal are alarming: One in four children under the age of 18 is obese, and in economically challenged areas, that number may rise to one in three. Only 17 years ago, the obesity rate in New York was about 10 percent -- that's a pretty remarkable jump.

But from the moment the words were out of his mouth, New Yorkers were all over the matter, expressing an almost universal disapproval for what became known as the fat tax.

“Any new tax is a bad tax, particularly in this state where we are taxed to death (highest tax rate in the nation when all taxes are taken into consideration), said Dave Barmen, a small business owner from Upstate New York. “And if you think the revenue from the tax will go to what it's supposedly earmarked for, it's highly unlikely.”

Barmen also attacked the core purpose of the proposed tax – decreasing obesity and related health issues.

“All these laws that restrict personal freedom are antithetical to the whole purpose of this democratic experiment we call the United States,” he said, citing seat belt, helmet, hand-free cell phone and gambling statutes as unfair and unpatriotic. “It's one thing to have laws that protect people from harm inflicted by others ... it's idiotic to have laws that protect us from our own selves.”

And plenty of people agree with Barmen, judging from discourse throughout the blogosphere.

Even people who agree something needs to be done to squelch obesity, and childhood obesity in particular, believe taxing the matter away is neither necessary nor productive.

“Educate children on nutrition. Make home [economics] a mandatory class and make healthy eating the core focus,” one New Yorker suggested. “Because you will not stop people from drinking soda with an 18 percent tax.”

The idea of an 18 percent tax not being enough to deter unwanted behavior is also supported by a sizable segment of the population.

“I think the tax would have to be much higher to have a significant impact,” one blog poster said. “While some may switch to diet, an 18 percent increase is only about a 25 cent increase in total price on a two liter. I think people will pay for it: they are too addicted to their sugar and caffeine not to.”

Beth Walter Honadle is a political science professor at the University of Cincinnati. She specializes in public policy research and says the issue must be looked at from two perspectives.

Excluding tax income as the sole or even primary impetus for the soda tax, that leaves two objectives for the proposed but now aborted implementation: to less the consumption of soft drinks and/or to decrease obesity rates.

Honadle offered as alternatives to taxation educational programs, subsidization of healthier alternatives and on outright ban on the sale of sugared soft drinks.

Although, “We all know how well Prohibition worked out,” she said.

She said that if decreasing obesity is the ultimate goal and government feels it wants or needs to intervene, that intervention could take the form of building more pedestrian-friendly areas, building more bike lanes, requiring more physical education in schools and requiring employers to provide recreational facilities.

But all those things cost money, and doesn’t that just put us right back where we started?