How Beverage Industry Defeated New York’s Penny-Per-Ounce Soda Tax

pounds-4802On Friday, the New York Times ran a depressing account of how the beverage industry used clever marketing gimmicks and millions of dollars to defeat the the state’s penny-per-ounce tax on soda. Using the front New Yorkers Against Unfair Taxes, the industry framed the policy as a new tax on struggling middle and lower class families during an economic recession and spent at least 9.8 million on the campaign:

The tax that the governor’s allies referred to somewhat awkwardly as a “sugary beverage tax” immediately became known in the vernacular as “the fat tax,” which sounded like a rebuke to anyone who has ever stood on a bathroom scale and winced. The governor quickly threw in the towel that first year, when he still aspired to run for election in 2010. […]

The health message resonated with public-spirited groups like the New York Academy of Medicine and editorial writers. Enter New Yorkers Against Unfair Taxes, set up by the beverage industry, grocers and the Teamsters, who work as drivers and in production. The organization’s Web site describes it as a humble coalition of “hard-working individuals, struggling families and already burdened small businesses,” like Benny’s Pizza and Kay’s Deli.

But behind the scenes, much of the strategic work came from Goddard Claussen, the public affairs company whose “Harry and Louise” commercials helped defeat President Bill Clinton’s health care overhaul efforts. The company was retained by the American Beverage Association to lobby against the New York tax.

On the whole, all of this is really bad news. Researchers say that “the link between obesity and soda is scientifically stronger than the link between obesity and any other type of food or beverage” and predict that sugar-sweeted beverages “may be the single largest driver of the obesity epidemic.” Each year, obese adults incur “an estimated $1,429 more in medical expenses than their normal-weight peers,” and overall, the nation spent up to $147 billion on obesity-related costs in 2008.

As David Leonhardt noted back in in May, “[s]omeday, we will probably look back on our gallon-a-week soda habit the way we now look back on allowing children to ride without seat belts or listening to doctors who endorsed Camel cigarettes. We will wonder what we were thinking.” Indeed, the industry’s argument may have won the day, but you can’t get away from the reality taxing a non-essential commodity that only increases health care expenditures makes a lot of sense, particularly during periods of staggering deficits. Goddard Claussen defeated health reform in 1994, only to see comprehensive legislation passed 16 years later. Here’s to hoping the soda tax won’t take half that long.