I can see two obvious flaws in the proposal by David Paterson, governor of New York (and Eliot Spitzer’s successor) to impose a “fat tax” on soft drinks such as Coca-Cola and Pepsi while allowing the diet versions of the drinks to escape.
One is that, if it really worked as advertised in making people cry off Coke and Pepsi, then the measure would not raise sorely-needed taxes for New York. In practice, the health aspect seems more like a cover story, rather like marketing taxes on petrol as “green taxes”.
The second is that I suspect it would be a very regressive tax. While people from all income brackets drink sugary soda sometimes, I think the upper middle class must drink less of it than poorer people.
Indeed, one of the notable social divides is modern society – which is evident in New York in particular – is that rich people tend to be thinner than poor people. Their diet is better and they are more inclined to keep fit.
It is an unfortunate fact, but it does mean that “health taxes” probably end up hitting the poor disproportionately.
